| 2013 | 2014 | 2018 | 2019 (projected) | State Auto Interest Expense | 8,500,000 | 5,400,000 | 4,860,000 | 5,218,246 | State Auto Gross Profit | 433,200,000 | 401,400,000 | 455,220,000 | 29,600,000 |
State Auto is getting off balance
 | By Rifka Kats | Macroaxis Story |
Today article will go over State Auto. I will address the reasons why this entity was insulated from the current market uncertainty. The company Piotroski F Score is 3 - Frail. Given the investment horizon of 30 days, State Auto is expected to generate 1.5 times more return on investment than the market. However, the company is 1.5 times more volatile than its market benchmark. It trades about 0.09 of its potential returns per unit of risk. The market is currently generating roughly 0.12 per unit of risk. We consider State Auto very steady. State Auto Financial owns Efficiency Ratio (i.e. Sharpe Ratio) of 0.09 which indicates the firm had 0.09% of return per unit of risk over the last 1 month. Our philosophy towards measuring volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for State Auto Financial Corporation which you can use to evaluate future volatility of the company. Please validate State Auto Semi Deviation of 0.9679, Risk Adjusted Performance of 0.0809 and Coefficient Of Variation of 987.24 to confirm if risk estimate we provide are consistent with the epected return of 0.0978%.
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Reviewed by Raphi Shpitalnik
STATE AUTO FINL C currently holds roughly 72.3M in cash with (49.67M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.67. This firm dividends can provide a clue to current valuation of the stock. State Auto one year expected dividend income is about $0.2 per share. Let me now analyze State Auto Current Valuation. In accordance with recently published financial statements State Auto Financial Corporation has Current Valuation of 1.57B. This is 95.22% lower than that of the Financial Services sector, and 86.78% lower than that of Insurance - Property & Casualty industry, The Current Valuation for all stocks is 90.56% higher than State Auto.
How important is State Auto's Liquidity
State Auto financial leverage refers to using borrowed capital as a funding source to finance State Auto Financial ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. State Auto 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 State Auto'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 State Auto'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 State Auto's total debt and its cash.
State Auto Correlation with Peers
Investors in State can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in State Auto Financial. Diversification will allow for the same portfolio return with reduced risk. The correlation table of State Auto and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities State 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 State for more details
What is driving State Auto Investor Appetite?
The current investor indifference towards the small price fluctuations of State Auto has created some momentum for investors as it was traded today as low as 35.91 and as high as 36.45 per share. The company directors and management did not add any value to State Auto Financial investors in June. However, most investors can still diversify their portfolios with State Auto to hedge your portfolio against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.0868. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. State Auto defends 2.51x price to earnings to growth. State Auto is selling for under 36.07. That is 0.36 percent decrease. Today lowest is 35.91. State Auto Revenues is increasing over the last 5 years. The current value of State Auto Revenues is 1,320,000,000. Also, State Auto Investments is increasing over the last 5 years.
In closing, our analysis show that State Auto Follows market closely. The company is fairly valued and projects probability of distress low for the next 2 years. Our prevailing buy vs hold vs sell advice on the company is Strong Buy.
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