National General (NGHC, $20.41) to be acquired for $4 billion by Allstate (ALL, $89.04)

Insurance company Allstate  announced that it will acquire property and casualty insurance provider National General Holdings  for about $4 billion in cash.

According to Allstate CEO Tom Wilson’s statement, the acquisition would accelerate  Allstate's strategy to increase market share in personal property-liability and also significantly expands its independent agent distribution.

The deal will be financed by  $2.2 billion in cash resources and by issuing $1.5 billion in new senior debt.

In 2019, National General's gross premiums written were $5.6 billion, which generated $319 million in operating income, the companies said.

According to Tickeron:

Technical Analysis (Indicators)

Bearish Trend Analysis

The RSI Indicator appears to be shifting from an Uptrend to a Downtrend. In 14 of 26 cases where NGHC's RSI indicator exited the overbought zone, the price fell further within the following month. The odds of a continued Downtrend are 54%.

The Momentum Indicator moved below the 0 level on July 02, 2020. Traders may consider selling the ticker, shorting the ticker, or exploring put options. In 51 of 94 cases where NGHC's Momentum Indicator fell below the 0 level, its price fell further within the subsequent month. The odds of a continued Downtrend are 54%.

The Moving Average Convergence Divergence (MACD) crossed below the signal line. In 24 of 45 cases where NGHC's MACD histogram became negative, the price fell further within the following month. The odds of a continued Downtrend are 53%.

The higher Bollinger Band was broken -- a price fall is expected as the ticker heads toward the middle band, which invites the trader to consider selling or shorting the ticker, or exploring put options. In 22 of 36 cases where NGHC's price broke its higher Bollinger Band, its price dropped further during the following month. The odds of a continued Downtrend are 61%.

Bullish Trend Analysis

The Aroon Indicator entered an Uptrend today. In 89 of 151 similar cases where NGHC Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 59%.

Fundamental Analysis (Ratings)

Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 52%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.05.

The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. NGHC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 100, placing this stock worse than average.

The Tickeron PE Growth Rating for this company is 85 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is 50 (best 1 - 100 worst), indicating steady price growth. NGHC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of 44 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.03) is normal, around the industry mean (1.10). P/E Ratio (7.26) is within average values for comparable stocks, (34.74). Projected Growth (PEG Ratio) (0.10) is also within normal values, averaging (4.04). Dividend Yield (0.81) settles around the average of (1.40) among similar stocks. P/S Ratio (0.37) is also within normal values, averaging (1.38).

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.