Hippo Stock Story


USD 0.97  0.05  5.43%   

Given the investment horizon of 90 days Hippo Holdings is expected to generate 4.45 times more return on investment than the market. However, the company is 4.45 times more volatile than its market benchmark. It trades about -0.02 of its potential returns per unit of risk. The DOW is currently generating roughly -0.08 per unit of risk. As many adventurous traders are excited about financial services space, it is only fair to outline the risk of shorting Hippo Holdings based on its current volatility spike. We will go over a few points Hippo Holdings institutional investors should remember regarding its volatility.
Published over three months ago
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How risky is to double down on Hippo Holdings in June?

This firm currently holds 299 M in liabilities. The company has a current ratio of 2.1, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Hippo Holdings until it has trouble settling it off, either with new capital or with free cash flow. So, Hippo Holdings' 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 Hippo Holdings sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Hippo to invest in growth at high rates of return. When we think about Hippo Holdings' use of debt, we should always consider it together with cash and equity.
The company retains a Market Volatility (i.e., Beta) of 1.8943, which attests to a somewhat significant risk relative to the market. Let's try to break down what Hippo's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Hippo Holdings will likely underperform. Even though it is essential to pay attention to Hippo Holdings current price history, it is always good to be careful when utilizing equity current price movements. Our philosophy towards determining any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Hippo Holdings exposes twenty-seven different technical indicators, which can help you to evaluate its performance. Hippo Holdings has an expected return of -0.11%. Please be advised to check out Hippo Holdings maximum drawdown, as well as the relationship between the expected short fall and rate of daily change to decide if Hippo Holdings performance from the past will be repeated at some point in the near future.
Volatility is a rate at which the price of Hippo Holdings or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Hippo Holdings may increase or decrease. In other words, similar to Hippo's beta indicator, it measures the risk of Hippo Holdings and helps estimate the fluctuations that may happen in a short period of time. So if prices of Hippo Holdings fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.

Watch out for price decline

Please consider monitoring Hippo Holdings on a daily basis if you are holding a position in it. Hippo Holdings is trading at a penny-stock level, and the possibility of delisting is much higher compared to other equities. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Hippo Holdings stock to be traded above the $1 level to remain listed. If Hippo Holdings stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.

How important is Hippo Holdings's Liquidity

Hippo Holdings financial leverage refers to using borrowed capital as a funding source to finance Hippo Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Hippo Holdings 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. Please check the breakdown between Hippo Holdings's total debt and its cash.

How does Hippo utilize its cash?

To perform a cash flow analysis of Hippo Holdings, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Hippo Holdings is receiving and how much cash it distributes out in a given period. The Hippo Holdings cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Hippo Holdings Net Cash Flow from Operations is quite stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at (127.78 Million)

Hippo Holdings Volatility Drivers

Hippo Holdings unsystematic risk is unique to Hippo Holdings and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Hippo Holdings you can also buy The Charles Schwab. You can also mitigate this risk by investing in the insurance—specialty sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Hippo Holdings important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Hippo Holdings income statement and balance sheet. Here are more details about Hippo volatility.
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Payment of 18740 shares by Ran Harpaz of Hippo Holdings subject to Rule 16b-3

Legal trades by Hippo Holdings insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Hippo insider trading alert for payment of common stock by Ran Harpaz, Chief Operating Officer, on 17th of August 2022. This event was filed by Hippo Holdings Inc with SEC on 2022-08-17. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Going after Hippo Financials

Hippo Holdings reported the previous year's revenue of 75.5 M. Net Loss for the year was (364.8 M) with profit before overhead, payroll, taxes, and interest of 7 M.

Over 3 percent rise for Hippo Holdings. What does it mean for institutional investors?

Latest standard deviation is at 4.18. Hippo Holdings exhibits very low volatility with skewness of 0.1 and kurtosis of 0.2. However, we advise investors to further study Hippo Holdings technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Hippo Holdings' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Hippo Holdings' 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.

Hippo Holdings Implied Volatility

Hippo Holdings' implied volatility exposes the market's sentiment of Hippo Holdings stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Hippo Holdings' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Hippo Holdings stock will not fluctuate a lot when Hippo Holdings' options are near their expiration.

Our Final Take On Hippo Holdings

Whereas some firms in the insurance—specialty industry are either recovering or due for a correction, Hippo may not be as strong as the others in terms of longer-term growth potentials. Taking everything into account, as of the 13th of May 2022, our concluding 90 days buy vs. sell advice on the company is Hold. We believe Hippo Holdings is undervalued with quite high probability of distress for the next two years.

Editorial Staff

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 Vlad Skutelnik do not own shares of Hippo Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.

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