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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
White Mountains Insurance Group, Ltd. (XNYS:WTM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WTM
Name:
WHITE MOUNTAINS INSURANCE GROUP, LTD. (XNYS:WTM)
Sector:
- 41500.00K
Industry:
Insurance�Property & Casualty
CEO:
Mr. George Rountree
Total Employees:
1,648
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WHITE MOUNTAINS INSURANCE GROUP, LTD.(WTM) 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 ($) :
1359.01
One Month Price Target:
$1361.96
Six Month Price Target :
$1376.71
Likely Price in One Year's Time:
Ticker:
$1394.41
Likely Trading Range Today Under (Normal Volatility)
$1355.21
Price Upper limit ($) :
$1364.11
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$1305.8
This week:
$1240.04
This month :
$1121.07
Other Primary facts
Market Cap:
3.95B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
2.91M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.67%
-11.56%
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:
$1,605.84
$1,492.17
$1,112.18
$1,225.85
Medium risk (<10%) entry points
Buy Call
Sell Call
$1,455.17
Buy Put:
Sell Put:
$1,430.90
$1,262.54
$1,287.12
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WTM
Sharpe Ratio:
2.02%
Comparison:
WTM, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 46.41% higher than the industry
& is -11.19% lower than the market/S&P 500 average
Average Returns/Yield of
WTM
Daily returns:
0.05%
Weekly returns:
0.24%
Monthly returns:
0.96%
Yearly returns:
10.43%
Comparison of returns:
Average annual returns/yield (last 3 years) is 10.29% above industry average
Classification:
WTM, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.57
Statistical test of Returns:
WTM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.93%
Weekly Volatility:
4.31%
Monthly Volatility:
8.63%
Yearly Volatility:
29.89%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.36%
Volatility in last five trading days has been -81.27% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.92%
Weekly VaR:
-8.75%
Monthly VaR:
-17.51%
How Much Can the price of
WTM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-60.65%
This translates to price declining to:
$1,156.06
This translates to price declining to:
$534.75
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WTM is a 23.58% riskier investment compared to the market/S&P 500 & is 5.87% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -19.86% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WTM
Beta in relation to market/S&P 500--0.39
Expected beta in 1 year's time:
0.505
Expected beta in 3 year's time:
0.714
Unlevered (debt free) Beta:
0.332
Beta in relation to Nasdaq (XNAS):
0.404
Beta in relation to all global stocks::
0.537
Beta Comparison & Analysis
Beta of competitors/peers::
1.086
Beta is -64.30% lower than peers
Average Industry Beta:
0.555
Beta is -30.18% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.057
Alpha is 63.91% above industry average alpha yield
Alpha is 362% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WTM
Equity cost of capital:
0.058
Equity cost of capital is -16.50% below industry mean WACC
Unlevered (without debt) cost of capital:
4.97%
Before-tax cost of debt:
5.75%
After-tax cost of debt:
4.54%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.54%
WACC is -13.90% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$383.73
Revenue growth rate per share of (3Y):
1.08
Annual revenue growth rate is 100.17% above the industry average
EPS:
-$54.94
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$29.89
Balance sheet equity growth per share: -11.66%
Equity growth rate per share is -125.78% lower than the industry
Debt per share
$162.61
EBITDA per share
-$5.47
Valuation Analysis Today of
WTM
P/E Ratio:
0
P/E Ratio of Competitors/Peers:
23.71
P/E ratio is -100.00% lower than main peers & is higher than the industry
-
WTM is -241.38% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $63.02
Present value of the expected future dividends only: $51.68
P/S (Price to Sales ratio):
3.54
Price to sales ratio is 47.65% above the industry mean
P/B (Price to book value ratio):
1.08
Price to free cash flow: 45.47
Price to free cash flow ratio is 688.73% higher than the industry
Net income growth rate (3Y):
111.21%
Net income growth rate is -481.03% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: -1.80%
Dividend yeild: 0.22%
Previous Dividend: $1.00
Previous adjusted dividend: $1.00
Previous Dividend: $3.00
-
-
Average dividend payment (long-term): $1.00
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 21/06/2022
Expected next dividend record date: 13/06/2022
Expected next dividend declaration date: 26/05/2022
Previous dividend payment date: 23/03/2022
Previous dividend record date: 14/03/2022
Previous dividend declaration date: 25/02/2022
Dividend History:
2022-03-11--$1.00
2020-03-13--$1.00
--$0.00
2021-03-12--$1.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
13.35%
Net debt to equity ratio:
10.27%
Debt to assets ratio:
6.43%
Net debt to assets ratio:
4.95%
Debt-to-asset ratio is -90.34% below industry average
Ability to repay debt:
Interest coverage ratio:
-0.4
Interest coverage ratio is -108.32% less than industry average
Looking forward:
Debt growth rate:
84.11%
Annual debt growth is -3838% lower than industry average debt growth rate
Debt repayment rate in last quarter: 3.04%
Analysis of Key Statistics
Correlation of price movement with the market:
0.484
Statistical significance of correlation:
WTM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.6
Stock price is -19.31% less 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):
0.028
Covariance of price movement with the market:
0.032
Kurtosis
14.502
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.918
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
WTM
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
-25.24%
Effective tax rate is -226.30% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-4.71%
Return on equity (ROE) is -157.80% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-2.27%
Return on assets (ROA) is -247.85% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
-1.74%
In-depth Efficiency Analysis
Revenue generated per employee:
676.9K
Each employee generates -44% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 9.6K
Each employee generates -105% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 101.2K
Each employee generates -172% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 25.2K
Each employee generates -142% less free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates -142% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WTM
PENNYMAC FINANCIAL SERVICES, INC. (XNYS:PFSI)
BANK OF HAWAII CORPORATION (XNYS:BOH)
ASSURED GUARANTY LTD. (XNYS:AGO)
MERCURY GENERAL CORPORATION (XNYS:MCY)
DATTO HOLDING CORP. (XNYS:MSP)
CNO FINANCIAL GROUP, INC. (XNYS:CNO PR A)
CI Financial Corp. (XNYS:CIXX)
ASSOCIATED BANC-CORP (XNYS:ASB)
FSKR
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.12B
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:
-
-
-
450.40M
450.40M
-
-
-
-
39.70M
66.80M
- 15900.00K
-
- 166700.00K
- 175500.00K
44.30M
- 166700.00K
Statement of Cash Flow
Date:
Period:
16.00M
Differed Income Tax :
4.60M
Stock Based Compensation :
2.90M
Change in Working Capital :
- 46200.00K
Accounts Receivables:
- 320500.00K
Other Working Capital:
- 63400.00K
Other Non-Cash Items:
- 10400.00K
Net Cash Provided by Operating Activities:
- 41500.00K
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 174400.00K
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
327.10M
321.50M
648.60M
1.28B
-
-
-
-
-
-
2.02B
-
-
-
7.36B
7.36B
494.90M
218.20M
-
-
-
713.10M
472.70M
-
472.70M
3.45B
3.69B
3.00M
2.96B
- 400.0K
-
March 31, 2022 at 6:00:00 AM
1.29B
3.54B
7.23B
2.34B
690.90M
363.8M
270.00M
44.20M
139.80M
- 14800.00K
-
- 34800.00K
- 3000.00K
21.50M
- 31100.00K
600.00K
67.80M
327.10M
259.30M
- 41500.00K
-
- 41500.00K
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
WTM
2023
2024
2025
2026
2027
$1,401.38
$917.70
$941.61
$966.13
$991.30