Value
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.2 |
| P/S | 9.6 |
| EV/EBITDA | 7.0 |
| Fwd P/E | 9.2 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 10.6x
- ▸PEG: 0.12
- ▸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.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
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. | →Stable |
| 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. | →Stable |
| 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. | →Stable |
| 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. | →Stable |
| 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.
→StableBear 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.
→StableQuality 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.
→StableEarnings
- 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.
→StableMomentum 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.
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.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 0.7 |
| Gross margin | 3.8 |
| Op margin | 3.9 |
| Net margin | 2.7 |
| Current ratio | 8.3 |
| FCF quality | 10.0 |
| Moat | 4.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 418% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.1 |
| EPS growth | 10.0 |
Momentum
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 2.9 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.3 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.2 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $675,568 (0.014% of mkt cap)
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.0 |
| quality rank | 3.4 |
| growth rank | 2.5 |
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.4 |
| support resistance | 0.9 |
| 52w position | 9.8 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| volatility | 7.4 |
| put call | 10.0 |
| implied vol | 4.8 |
| beta | 8.1 |
| debt equity | 3.6 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.6 |
| dividend safety | 5.2 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 137.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.8<4.5
- ASYMMETRY:-1.8=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.75
Upside
-19.8%
Downside
11.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 24d with 3/4 beat streak
SuitabilityAggressive — MCap $4.9B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.8<4.5, ASYMMETRY:-1.8=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.75 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.5, Risk (lower is worse) at 7.3, and Growth at 6.5; the weakest are Peer rank at 3.5, Momentum at 3.8, and Technical at 4.4. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -1.75 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.