This firm runs under
Biotechnology sector within
Health Care industry. The company has 30.36
M in debt with debt to equity (D/E) ratio of 0.08, which may show that Trean Insurance is not taking advantage of profits from borrowing. Trean Insurance GroupInc has a current ratio of 1.53, which is typical for the industry and considered as normal. Debt can assist Trean Insurance until it has trouble settling it off, either with new capital or with free cash flow. So, Trean Insurance's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Trean Insurance GroupInc sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Trean to invest in growth at high rates of return. When we think about Trean Insurance's use of debt, we should always consider it together with cash and equity.
How important is Trean Insurance's Liquidity
Trean Insurance
financial leverage refers to using borrowed capital as a funding source to finance Trean Insurance Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Trean Insurance financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Trean Insurance's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Trean Insurance's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Trean Insurance's total debt and its cash.
Trean Insurance Correlation with Peers
Investors in Trean can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Trean Insurance Group. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Trean Insurance and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Trean is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Trean for more details
Breaking down the case for Trean Insurance
Trean Insurance is unstable given 3 months investment horizon.
Trean Insurance GroupInc owns Efficiency Ratio (i.e., Sharpe Ratio) of 0.11, which indicates the firm had 0.11% of return per unit of risk over the last 3 months. Our standpoint towards measuring the risk of a stock is to use both market data as well as company specific technical data. We were able to collect and analyze data for twenty-seven different
technical indicators, which can help you to evaluate if expected returns of 1.3% are justified by taking the suggested risk. Use Trean Insurance GroupInc Risk Adjusted Performance of 0.1475,
coefficient of variation of 964.75, and Semi Deviation of 3.68 to evaluate company specific risk that cannot be
diversified away.
Trean Insurance is likely to close below USD5.84 next week
Trean Insurance latest potential upside ascents over 7.81. Trean Insurance GroupInc is displaying above-average volatility over the selected time horizon. Investors should scrutinize Trean Insurance GroupInc independently to ensure intended market timing strategies are aligned with expectations about Trean Insurance volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Trean Insurance's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Trean Insurance's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Bottom Line On Trean Insurance GroupInc
Although other entities within the insurance—specialty industry are still a little expensive, even after the recent corrections, Trean Insurance may offer a potential longer-term growth to shareholders. To conclude, as of the 22nd of December 2022, we believe that at this point, Trean Insurance is
undervalued with
low odds of financial distress within the next 2 years. Our latest buy vs. sell advice on the firm is
Hold.
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Trean Insurance Group. Please refer to our
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