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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
W. R. Berkley Corporation (XNYS:WRB) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WRB
Name:
W. R. BERKLEY CORPORATION (XNYS:WRB)
Sector:
468.57M
Industry:
Insurance�Property & Casualty
CEO:
Mr. W. Robert Berkley
Total Employees:
7,681
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -917.31% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF W. R. BERKLEY CORPORATION(WRB) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�PROPERTY & CASUALTY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
64.77
One Month Price Target:
$65.
Six Month Price Target :
$66.14
Likely Price in One Year's Time:
Ticker:
$67.5
Likely Trading Range Today Under (Normal Volatility)
$64.58
Price Upper limit ($) :
$65.05
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$61.94
This week:
$58.44
This month :
$52.11
Other Primary facts
Market Cap:
17.43B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
265.27M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.96%
-15.43%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$77.90
$71.83
$51.64
$57.71
Medium risk (<10%) entry points
Buy Call
Sell Call
$69.85
Buy Put:
Sell Put:
$68.55
$59.68
$60.99
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WRB
Sharpe Ratio:
2.93%
Comparison:
WRB, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 111.57% higher than the industry
& ratio is 28.34% higher than the market/S&P 500 average
Average Returns/Yield of
WRB
Daily returns:
0.07%
Weekly returns:
0.36%
Monthly returns:
1.44%
Yearly returns:
10.43%
Comparison of returns:
Average annual returns/yield (last 3 years) is 66.04% above industry average
Classification:
WRB, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.41
Statistical test of Returns:
WRB has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.16%
Weekly Volatility:
4.84%
Monthly Volatility:
9.67%
Yearly Volatility:
33.51%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.69%
Volatility in last five trading days has been -68.07% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.37%
Weekly VaR:
-9.77%
Monthly VaR:
-19.55%
How Much Can the price of
WRB
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-67.71%
This translates to price declining to:
$54.11
This translates to price declining to:
$20.91
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WRB is a 37.96% riskier investment compared to the market/S&P 500 & is 18.19% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -10.15% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WRB
Beta in relation to market/S&P 500--0.63
Expected beta in 1 year's time:
0.576
Expected beta in 3 year's time:
0.814
Unlevered (debt free) Beta:
0.47
Beta in relation to Nasdaq (XNAS):
0.648
Beta in relation to all global stocks::
0.828
Beta Comparison & Analysis
Beta of competitors/peers::
1.063
Beta is -41.00% lower than peers
Average Industry Beta:
0.555
Beta is 13.02% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.92%
Sustainable growth rate is -13.98% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.099
Alpha is 183.99% above industry average alpha yield
Alpha is 628% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WRB
Equity cost of capital:
0.074
Equity cost of capital is 7.12% above industry mean WACC
Unlevered (without debt) cost of capital:
5.58%
Before-tax cost of debt:
5.12%
After-tax cost of debt:
4.04%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.04%
WACC is 8.23% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$38.57
Revenue growth rate per share of (3Y):
2.49
Annual revenue growth rate is -73.74% below industry average
EPS:
$4.96
Expected Annual growth rate of EPS (3Y):
15.32%
Expected future EPS growth rate is -1.93% lower than the Insurance�Property & Casualty industry
Free cash flow (FCF) per share:
$8.13
Balance sheet equity growth per share: 43.88%
Equity growth rate per share is -2.96% lower than the industry
Debt per share
$10.71
EBITDA per share
$7.45
Valuation Analysis Today of
WRB
P/E Ratio:
15.85
P/E Ratio of Competitors/Peers:
11.61
P/E ratio is 36.52% higher than main peers & is -9.43% lower than the industry
Stock price/value with industry average P/E ratio: $86.78
WRB is -25.37% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.68
Price to sales ratio is -29.99% below the industry mean
P/B (Price to book value ratio):
2.49
Price to free cash flow: 7.97
Price to free cash flow ratio is -52.12% lower than the industry
Net income growth rate (3Y):
54.61%
Net income growth rate is -287.12% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 1.66%
Dividend yeild: 2.92%
Previous Dividend: $0.50
Previous adjusted dividend: $0.50
Previous Dividend: $1.89
Expected next dividend best case: $0.78
Expected next dividend worst case: $0.22
Average dividend payment (long-term): $0.29
Average dividend increase/decrease (growth rate) % per period: 132.01%
Expected next dividend payment date: 10/05/2022
Expected next dividend record date: 26/09/2022
Expected next dividend declaration date: 13/09/2022
Previous dividend payment date: 07/07/2022
Previous dividend record date: 27/06/2022
Previous dividend declaration date: 15/06/2022
Dividend History:
2022-06-24--$0.50
2021-12-06--$0.67
2021-06-24--$0.33
2022-03-08--$0.09
2021-09-14--$0.09
2021-03-09--$0.08
Dividend growth rate is 186.45% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
41.40%
Net debt to equity ratio:
10.59%
Debt to assets ratio:
8.81%
Net debt to assets ratio:
2.25%
Debt-to-asset ratio is -86.75% below industry average
Ability to repay debt:
Interest coverage ratio:
13.59
Interest coverage ratio is 182.14% more than industry average
Looking forward:
Debt growth rate:
19.88%
Annual debt growth is -983% lower than industry average debt growth rate
Debt repayment rate in last quarter: 13.05%
Analysis of Key Statistics
Correlation of price movement with the market:
0.721
Statistical significance of correlation:
WRB has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.6
Stock price is 20.18% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.6
Correlation of price movement with Nasdaq (^IXIC):
0.062
Covariance of price movement with the market:
0.078
Kurtosis
9.519
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.206
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WRB
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
100%
Effective Tax Rate:
19.02%
Effective tax rate is -4.85% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.16%
Return on equity (ROE) is 147.56% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.29%
Return on assets (ROA) is 179.92% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 18.3 years
Stock based compensation to net income ratio:
0.83%
In-depth Efficiency Analysis
Revenue generated per employee:
1.3M
Each employee generates 11% more revenue than industry average revenue per employee
EBITDA generated per employee:
257.4K
Each employee generates 28% more EBITDA than industry average revenue per employee
Profit generated per employee:
180.1K
Each employee generates 28% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
61.0K
Each employee generates 1% more free cash flow than industry average revenue per employee
Assets/Capital per employee
2.5M
Each employee generates 1% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WRB
FIDELITY NATIONAL FINANCIAL, INC. (XNYS:FNF)
LOEWS CORPORATION (XNYS:L)
EQUITABLE HOLDINGS, INC (XNYS:EQH)
Greenthesis SpA (XMIL:GTH)
apo MultiAsset Mandat Protect PB
SHINHAN FINANCIAL GROUP CO.,LTD (XNYS:SHG)
LUFAX HOLDING LTD (XNYS:LU)
LINCOLN NATIONAL CORPORATION (XNYS:LNC)
FACTSET RESEARCH SYSTEMS INC. (XNYS:FDS)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�38%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
10.23B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
2.58B
-
-
-
-
-
-
-
145.50M
120.77M
1.98B
-
1.38B
1.72B
326.94M
1.38B
Statement of Cash Flow
Date:
Period:
24.63M
Differed Income Tax :
-
Stock Based Compensation :
11.44M
Change in Working Capital :
266.86M
Accounts Receivables:
- 69704.00K
Other Working Capital:
- 97945.00K
Other Non-Cash Items:
- 415885.00K
Net Cash Provided by Operating Activities:
477.68M
Investments in PP&E:
- 9114.00K
Net Acquisitions:
857.22M
Purchases of Investments:
- 2313993.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.11B
1.13B
3.24B
5.53B
-
-
-
417.89M
169.65M
-
18.74B
-
-
19.33B
51.58B
32.25B
524.56M
-
-
-
-
-
2.84B
-
2.84B
28.21B
25.36B
105.80M
9.58B
- 649229.0K
- 2174861.00K
March 31, 2022 at 6:00:00 AM
8.51B
6.86B
32.23B
19.87B
2.84B
727.1M
1.86B
126.55M
518.56M
- 426503.00K
-
-
- 22983.00K
- 1844.00K
- 451330.00K
1.08M
546.00M
2.11B
1.57B
477.68M
- 9114.00K
468.57M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
WRB
2023
2024
2025
2026
2027
$81.45
$84.88
$88.46
$92.19
$96.07