Value
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.9 |
| P/S | 9.5 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 9.7 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 7.3x
- ▸PEG: 0.10
- ▸Attractively valued
HG · Why this verdict
Why Hamilton Insurance Group (HG) 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 score6.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward price-to-earnings multiple of 6.7x and a PEG ratio of 0.10, the stock trades at a substantial discount to its earnings growth rate, creating a setup where consistent earnings delivery could drive meaningful multiple expansion without requiring estimate upgrades. Valuation breakdown | Forward price-to-earnings expands above 10x within 12 months as the earnings track record builds investor confidence. | →Stable |
| CounterLow insurance multiples often reflect the market's pricing of tail risk in the underwriting book; a single large catastrophe loss could impair earnings sharply and justify the current discount in hindsight. | ||
Reported revenue declined approximately 2% year-over-year while earnings grew strongly, creating a divergence that raises questions about whether the earnings improvement is durable or is being supported by factors — such as favorable loss ratios — that may not recur. Growth breakdown | Revenue returns to positive year-over-year growth of at least 3% for 2 consecutive reported quarters. | →Stable |
| CounterFor an insurance and reinsurance business, improving loss ratios and investment income can sustain earnings growth independently of headline revenue trends, making the divergence less alarming than it appears at first glance. | ||
The company has beaten analyst earnings estimates in each of the last four quarters by an average of approximately 74%, with the most recent quarter's 45% beat being the smallest — a consistent pattern suggesting the market has systematically underestimated this business's profitability. Earnings | At least 3 of the next 4 quarters produce positive EPS surprises of 20% or more. | →Stable |
| CounterVery large earnings beats in insurance often reflect favorable underwriting periods or reserve releases rather than structural underestimation; the magnitude of the beats may compress significantly in a less favorable underwriting environment. | ||
The put-to-call ratio of 6.0 is significantly elevated, indicating investors are buying put protection at a rate that dwarfs call activity — a broadly defensive positioning that can act as a ceiling on near-term appreciation even if earnings continue to beat. Risk breakdown | The put/call ratio falls below 2.0 over the next 6 months, indicating the defensive hedging overhang has materially subsided. | →Stable |
| CounterElevated put activity in smaller-cap insurance names sometimes reflects concentrated institutional hedges rather than broadly negative market sentiment; an unwind of those hedges could generate buying pressure rather than confirming the bearish read. | ||
At a forward price-to-earnings multiple of 6.7x and a PEG ratio of 0.10, the stock trades at a substantial discount to its earnings growth rate, creating a setup where consistent earnings delivery could drive meaningful multiple expansion without requiring estimate upgrades.
→StableValuation breakdown
- Expectation
- Forward price-to-earnings expands above 10x within 12 months as the earnings track record builds investor confidence.
CounterLow insurance multiples often reflect the market's pricing of tail risk in the underwriting book; a single large catastrophe loss could impair earnings sharply and justify the current discount in hindsight.
Reported revenue declined approximately 2% year-over-year while earnings grew strongly, creating a divergence that raises questions about whether the earnings improvement is durable or is being supported by factors — such as favorable loss ratios — that may not recur.
→StableGrowth breakdown
- Expectation
- Revenue returns to positive year-over-year growth of at least 3% for 2 consecutive reported quarters.
CounterFor an insurance and reinsurance business, improving loss ratios and investment income can sustain earnings growth independently of headline revenue trends, making the divergence less alarming than it appears at first glance.
The company has beaten analyst earnings estimates in each of the last four quarters by an average of approximately 74%, with the most recent quarter's 45% beat being the smallest — a consistent pattern suggesting the market has systematically underestimated this business's profitability.
→StableEarnings
- Expectation
- At least 3 of the next 4 quarters produce positive EPS surprises of 20% or more.
CounterVery large earnings beats in insurance often reflect favorable underwriting periods or reserve releases rather than structural underestimation; the magnitude of the beats may compress significantly in a less favorable underwriting environment.
The put-to-call ratio of 6.0 is significantly elevated, indicating investors are buying put protection at a rate that dwarfs call activity — a broadly defensive positioning that can act as a ceiling on near-term appreciation even if earnings continue to beat.
→StableRisk breakdown
- Expectation
- The put/call ratio falls below 2.0 over the next 6 months, indicating the defensive hedging overhang has materially subsided.
CounterElevated put activity in smaller-cap insurance names sometimes reflects concentrated institutional hedges rather than broadly negative market sentiment; an unwind of those hedges could generate buying pressure rather than confirming the bearish read.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Hamilton Insurance Group combines an attractive forward valuation at 6.7x earnings with a four-quarter beat streak averaging approximately 74% above estimates, but a declining revenue trend, an elevated put-to-call ratio of 6.0, and thin near-term upside to the price target argue for patience before adding exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 4.0 |
| Gross margin | 4.1 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 6.9 |
| FCF quality | 6.2 |
| Moat | 5.0 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 34%
- ▸Strong margins: 22%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -2%
Momentum
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.3 |
- ▸Overbought (RSI 72)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.7 |
| Price target | 4.9 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (7.0) — signal dampened
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 3.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $2,217,230 (0.065% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 7.5 |
| growth rank | 5.0 |
- ▸Superior ROE vs peers
Technical
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.7 |
| support resistance | 0.5 |
| 52w position | 9.8 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.1 |
| days to cover | 8.2 |
| volatility | 6.1 |
| put call | 10.0 |
| implied vol | 4.5 |
| beta | 10.0 |
| debt equity | 0.0 |
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.3>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.9=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.92
Upside
-13.8%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.4B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.9=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.92 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.5, Catalyst at 7.5, and Momentum at 7.3; the weakest are Technical at 3.7, Peer rank at 4.2, and Insider at 4.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.92 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Earnings Beat Streak
Trip ifEPS surprise falls below 5% for 2 consecutive quarters, indicating the exceptional beat streak has materially diminished.
- P2Deep Valuation Discount
Trip ifForward price-to-earnings expands above 12x, closing the valuation discount.
- P3Elevated Put Call Defensiveness
Trip ifPut/call ratio falls below 2.0 for 2 consecutive months, confirming the defensive hedging overhang has lifted.
- P4Revenue Decline Earnings Divergence
Trip ifRevenue growth turns positive above 3% year-over-year for 2 consecutive quarters, resolving the top-line divergence.