Value
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.1 |
| P/S | 9.5 |
| EV/EBITDA | 7.7 |
| Fwd P/E | 9.1 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 11.2x
- ▸PEG: 0.25
- ▸Attractively valued
CNO · Why this verdict
Why CNO Financial Group (CNO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.8/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
CNO's balance-sheet quality stands out — free cash flow runs at 418% of net income with a Piotroski F-Score of 8 out of 9 — but the most recent quarter delivered a -57.91% earnings miss after three strong consecutive beats, the stock is overbought at RSI 75 and has already traded past its analyst target, and a high-severity reinsurance counterparty concentration adds tail risk that is difficult to underwrite at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Concentration in the top-seven reinsurers is flagged as a high-severity risk; if any of those counterparties face credit stress, the company's ability to cede risk could be impaired, potentially forcing higher retained losses. Bear case | EPS surprise remains above 0% for 4 consecutive quarters, demonstrating that the reinsurer concentration has not impacted operating results. | ↑Improving |
| CounterConcentration among a small set of global reinsurers may reflect deliberate counterparty quality selection rather than poor risk management; large, investment-grade reinsurers carry lower credit risk than the concentration label implies. | ||
Free cash flow is 418% of net income and the Piotroski F-Score is 8 out of 9, indicating that reported earnings are backed by substantial cash generation and the business scores near-perfect on a broad-based operating quality framework. Quality breakdown | Free cash flow to net income ratio remains above 200% for four consecutive quarters, confirming the exceptional cash conversion is structural rather than a one-time result. | ↓Deteriorating |
| CounterHigh free cash flow ratios in an insurance business can be driven by favorable reserve releases or claims timing that does not reflect durable operating quality; a single adverse loss event could compress both metrics sharply. | ||
After three consecutive beats averaging roughly 25% above estimates, the most recent quarter produced a -57.91% earnings miss — a sharp reversal that raises questions about whether the prior beat streak was sustainable or whether a structural change has altered the earnings trajectory. Earnings | EPS beats with positive surprise above 5% are reported for 2 consecutive quarters, indicating the miss was an isolated event rather than the start of a new pattern. | ↑Improving |
| CounterA single miss, even a severe one, does not negate three quarters of strong execution; if the miss reflects a reserve charge or timing item rather than a structural earnings decline, the business may quickly revert to its prior beat cadence. | ||
RSI has reached 75, the stock is within 0.7% of its 52-week high, and the current price has already exceeded the analyst target level — the risk/reward is negative at this entry, with downside exceeding the remaining headroom. Momentum breakdown | RSI drops below 50 for 20 consecutive trading days, indicating momentum has normalized and a more favorable entry point may emerge. | ↑Improving |
| CounterOverbought readings in a stock with positive momentum can persist for extended periods; the strong price trend and volume accumulation suggest buyers remain in control, and the premium to target can compress through analyst upgrades rather than price declines. | ||
Concentration in the top-seven reinsurers is flagged as a high-severity risk; if any of those counterparties face credit stress, the company's ability to cede risk could be impaired, potentially forcing higher retained losses.
↑ImprovingBear case
- Expectation
- EPS surprise remains above 0% for 4 consecutive quarters, demonstrating that the reinsurer concentration has not impacted operating results.
CounterConcentration among a small set of global reinsurers may reflect deliberate counterparty quality selection rather than poor risk management; large, investment-grade reinsurers carry lower credit risk than the concentration label implies.
Free cash flow is 418% of net income and the Piotroski F-Score is 8 out of 9, indicating that reported earnings are backed by substantial cash generation and the business scores near-perfect on a broad-based operating quality framework.
↓DeterioratingQuality breakdown
- Expectation
- Free cash flow to net income ratio remains above 200% for four consecutive quarters, confirming the exceptional cash conversion is structural rather than a one-time result.
CounterHigh free cash flow ratios in an insurance business can be driven by favorable reserve releases or claims timing that does not reflect durable operating quality; a single adverse loss event could compress both metrics sharply.
After three consecutive beats averaging roughly 25% above estimates, the most recent quarter produced a -57.91% earnings miss — a sharp reversal that raises questions about whether the prior beat streak was sustainable or whether a structural change has altered the earnings trajectory.
↑ImprovingEarnings
- Expectation
- EPS beats with positive surprise above 5% are reported for 2 consecutive quarters, indicating the miss was an isolated event rather than the start of a new pattern.
CounterA single miss, even a severe one, does not negate three quarters of strong execution; if the miss reflects a reserve charge or timing item rather than a structural earnings decline, the business may quickly revert to its prior beat cadence.
RSI has reached 75, the stock is within 0.7% of its 52-week high, and the current price has already exceeded the analyst target level — the risk/reward is negative at this entry, with downside exceeding the remaining headroom.
↑ImprovingMomentum breakdown
- Expectation
- RSI drops below 50 for 20 consecutive trading days, indicating momentum has normalized and a more favorable entry point may emerge.
CounterOverbought readings in a stock with positive momentum can persist for extended periods; the strong price trend and volume accumulation suggest buyers remain in control, and the premium to target can compress through analyst upgrades rather than price declines.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.6 |
| ROA | 0.8 |
| Gross margin | 4.2 |
| Op margin | 10.0 |
| Net margin | 4.6 |
| Current ratio | 5.0 |
| Moat | 4.4 |
| Piotroski F | 6.7 |
- ▸No competitive moat
Growth
0.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.4 |
- ▸Declining revenue: -9%
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.7 |
| Analyst rating | 5.0 |
| Price target | 4.2 |
- ▸LLM news sentiment: +0.33 (n=3)
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $2,641,321 (0.050% of mkt cap)
Peer rank
2.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 5.5 |
| growth rank | 0.0 |
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.8 |
| support resistance | 2.1 |
| 52w position | 9.6 |
| gap | 5.0 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| volatility | 7.0 |
| put call | 10.0 |
| implied vol | 6.7 |
| beta | 8.2 |
| debt equity | 2.9 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.5 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:EARNINGS:0.60
- EARNINGS_PROXIMITY:92d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-2.27
Upside
-19.3%
Downside
8.5%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 65, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-2.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -2.27 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.8, Risk (lower is worse) at 7.5, and Catalyst at 7.0; the weakest are Growth at 0.4, Peer rank at 2.4, and Insider at 3.8. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -2.27 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Cash Conversion Near Perfect Quality
Trip ifFree cash flow to net income ratio falls below 150% for 2 consecutive quarters.
- P2Sharp Earnings Miss Breaks Beat Streak
Trip ifEPS surprise exceeds 5% for 2 consecutive quarters.
- P3Overbought Stock Above Analyst Target
Trip ifRSI drops below 50 for 20 consecutive trading days.
- P4Reinsurance Counterparty Concentration
Trip ifEPS surprise remains above 0% for 4 consecutive quarters without any disclosed reinsurance-related reserve charge.