WTM White stock Story

WTM -  USA Stock  

USD 1,115  7.25  0.65%

White Mountains Insu is scheduled to announce its earnings today. As many passive investors are finally getting excited about financial services space, White Mountains Insurance could be a good starting point. We will check if the company can maintain a respectable level of debt while minimizing operating losses.
Published over six months ago
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Thinking to drop White (NYSE:WTM) based on its current debt commitments?
White Mountains Insu has 393.4 M in debt with debt to equity (D/E) ratio of 0.13, which may show that White Mountains is not taking advantage of profits from borrowing. The firm maintains a market beta of 0.1295, which attests to not very significant fluctuations relative to the market. Let's try to break down what White's beta means in this case. As returns on the market increase, White Mountains returns are expected to increase less than the market. However, during the bear market, the loss on holding White Mountains will be expected to be smaller as well. Even though it is essential to pay attention to White Mountains Insu historical price patterns, it is always good to be careful when utilizing equity current price history. 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. White Mountains Insu exposes twenty-eight different technical indicators, which can help you to evaluate its performance. White Mountains Insu has an expected return of -0.0119%. Please be advised to check out White Mountains Insu maximum drawdown, as well as the relationship between the skewness and day typical price to decide if White Mountains Insu stock performance from the past will be repeated at some point in the near future.
White Mountains financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of White Mountains, including all of White Mountains'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 White Mountains assets, the company is considered highly leveraged. Understanding the composition and structure of overall White Mountains 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.

How important is White Mountains's Liquidity

White Mountains financial leverage refers to using borrowed capital as a funding source to finance White Mountains Insurance ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. White Mountains 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 White Mountains's total debt and its cash.

How WTM White utilizes its cash?

To perform a cash flow analysis of White Mountains, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash White Mountains is receiving and how much cash it distributes out in a given period. The White Mountains cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Detailed Perspective On White Mountains

The small pull down in market price for the last few months may raise some interest from stakeholders as it is trading at a share price of 903.85 on slow start in trading volume. The company executives did not add much value to White Mountains Insurance investors in October. However, diversifying your holdings with White Mountains Insu or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 1.93. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.

Can White Mountains correct the new pull down?

White Mountains new skewness upsurges over 0.49. White Mountains Insurance has relatively low volatility with skewness of 0.49 and kurtosis of 0.83. However, we advise all investors to independently investigate White Mountains Insurance to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

The Current Takeaway on White Mountains Investment

When is the right time to buy or sell White Mountains Insurance? Buying stocks such as White Mountains isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily bases. To summarize, as of the 7th of November 2020, we believe that White Mountains is currently fairly valued with low chance of financial distress in the next two years. Our latest 30 days buy-hold-sell recommendation on the company is Cautious Hold.

About Contributor

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 Raphi Shpitalnik do not own shares of White Mountains Insurance. Please refer to our Terms of Use for any information regarding our disclosure principles.

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