United Fire price slump is puzzling
 | By Vlad Skutelnik | Macroaxis Story |
This post is geared to all United Fire management as well as to investors considering exiting their position in the enterprise. I will evaluate if United Fire shares are sensibly priced going into July and whether management should be worried. The company current daily volatility is 6.54 percent, with beta of 1.32 and alpha of -0.49 over DOW. We found thirty-four available drivers for United Fire Group, which can be compared to its competition. To make sure the equity is not overpriced, please validate all United Fire financials, including its Price to Book, Current Ratio, Retained Earnings, as well as the relationship between Net Income and Price to Earnings To Growth . Given that United Fire Group has Number of Shares Shorted of 250.36 K, we advise you double-check United Fire Group current market performance to make sure the company can sustain itself down the road. Use United Fire to enhance returns of your portfolios. The stock experiences unexpected upward trend. Watch out for market signals. Check odds of United Fire to be traded at $33.26 in 30 days.
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Reviewed by Michael Smolkin
United Fire Group currently holds 17.39 M in liabilities with Debt to Equity (D/E) ratio of 1.8 which is about average as compared to similar companies. This firm dividends can provide a clue to current valuation of the stock. United Fire one year expected dividend income is about $1.75 per share. The company has Profit Margin (PM) of 0.01 % which maeans that even a very small decline in it revenue will erase profits resulting in a net loss. This is way below average. Similarly, it shows Operating Margin (OM) of (12.22) % which suggests for every $100 dollars of sales it generated a net operating loss of -0.12. United Fire financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of United Fire, including all of United Fire's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of United Fire assets, the company is considered highly leveraged. Understanding the composition and structure of overall United Fire debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.
Understanding United Total Liabilities
United Fire Group liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. United Fire Group has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on United Fire balance sheet include debt obligations and money owed to different United Fire vendors, workers, and loan providers. Below is the chart of United short long-term liabilities accounts currently reported on its balance sheet. You can use United Fire Group financial leverage analysis tool to get a better grip on understanding its financial positionHow important is United Fire's Liquidity
United Fire financial leverage refers to using borrowed capital as a funding source to finance United Fire Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. United Fire 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 United Fire'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 United Fire'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 United Fire's total debt and its cash.
Is United Fire valued wisely by the market?
The big decline in price over the last few months for United Firehas created some momentum for investors as it was traded today as low as 27.0 and as high as 27.88 per share. The company directors and management failed to add value to investors and positioning the company supply of money to exploit market volatility in May. However, diversifying your holdings with United Fire Group or any similar stocks can still protect your portfolios during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 6.54. The very high volatility is mostly attributed to the latest market swings and not very good earning reports from some ot the United Fire Group partners. United Fire is trading at 27.72. This is 2.21 percent increase. Day high is 27.88. United Fire Average Assets is relatively stable at the moment. Further, United Fire Net Income Per Employee is decreasing over the last 8 years. The latest value of United Fire Net Income Per Employee is 12,835. United Fire Group, Inc., together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States. United Fire Group, Inc. was founded in 1946 and is headquartered in Cedar Rapids, Iowa. United Fire operates under InsuranceProperty Casualty classification in USA and is traded on BATS Exchange. It employs 1173 people.To conclude, our concluding buy vs hold vs sell advice on the enterprise is Cautious Hold. We believe United Fire is under valued with close to average chance of financial distress for the next two years.
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