Value
7.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.3 |
| P/S | 9.5 |
| EV/EBITDA | 5.9 |
| Fwd P/E | 9.2 |
| PEG | 6.1 |
- ▸Forward P/E: 10.6x
- ▸PEG: 1.22
- ▸Attractively valued
HMN · Why this verdict
Why Horace Mann Educators Corporati (HMN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock trades at roughly 9.5 times forward earnings with a PEG near 1.0 — a combination that screens as attractively valued for a specialty insurer with a consistent earnings delivery track record. Valuation breakdown | The forward multiple expands toward 12 times over the next 12 months as the earnings beat streak sustains and investor confidence in the franchise grows. | →Stable |
| CounterThe stock has moved above its near-term price target, meaning the apparent valuation attractiveness has already been partially recognized; further upside from current levels is limited without a meaningful revision to earnings estimates. | ||
The stock has moved above its near-term price target and the risk/reward geometry is currently unfavorable — the current price does not offer incremental reward adequate to compensate for near-term risk, making the setup more appropriate for existing holders than new entrants. Warnings | A correction to approximately $43 or below would restore at least 12% upside to the prior resistance level, reopening an acceptable entry geometry. | →Stable |
| CounterTechnical momentum is strong — golden cross, above all moving averages, rising OBV, bullish MACD — and the stock may continue drifting higher on trend momentum even past the technical target, particularly if the earnings beat streak continues. | ||
The business has beaten consensus earnings estimates in each of the last four quarters, with an average quarterly beat of roughly 33 percentage points — a record of consistently under-promising and over-delivering that suggests management has reliable near-term visibility into underwriting results. Earnings | Average EPS beat remains above 10% for at least 3 of the next 4 quarters. | →Stable |
| CounterEarnings surprises in property and casualty insurance are often driven by favorable loss development, which is inherently variable; elevated catastrophe activity in concentrated geographies could reverse the beat streak quickly. | ||
With roughly 61% of exposure concentrated in the top ten states — above the 60% level that marks elevated single-region risk — the business faces idiosyncratic regional tail risk: a sustained regional economic shock or elevated catastrophe activity in key states could cause outsized claims development that a more diversified insurer would absorb more readily. Bear case | Geographic concentration should fall below 55% over the next 12 months for the structural risk concern to meaningfully diminish. | →Stable |
| CounterDeep presence in specific geographies can enable more precise actuarial pricing and stronger local distribution; the same concentration that creates tail risk may also generate above-average underwriting margins within those states. | ||
The business converts free cash flow at 167% of net income and achieves a perfect 9 out of 9 financial health score — metrics that suggest the balance sheet is sound and reported earnings are backed by genuine cash generation. Quality breakdown | Free cash flow conversion remains above 120% of net income over the next four quarters. | →Stable |
| CounterIn insurance, free cash flow in excess of net income can reflect timing differences in claims reserves that reverse in higher-loss environments; a deterioration in the loss ratio would reduce both reported earnings and realized free cash flow simultaneously. | ||
The stock trades at roughly 9.5 times forward earnings with a PEG near 1.0 — a combination that screens as attractively valued for a specialty insurer with a consistent earnings delivery track record.
→StableValuation breakdown
- Expectation
- The forward multiple expands toward 12 times over the next 12 months as the earnings beat streak sustains and investor confidence in the franchise grows.
CounterThe stock has moved above its near-term price target, meaning the apparent valuation attractiveness has already been partially recognized; further upside from current levels is limited without a meaningful revision to earnings estimates.
The stock has moved above its near-term price target and the risk/reward geometry is currently unfavorable — the current price does not offer incremental reward adequate to compensate for near-term risk, making the setup more appropriate for existing holders than new entrants.
→StableWarnings
- Expectation
- A correction to approximately $43 or below would restore at least 12% upside to the prior resistance level, reopening an acceptable entry geometry.
CounterTechnical momentum is strong — golden cross, above all moving averages, rising OBV, bullish MACD — and the stock may continue drifting higher on trend momentum even past the technical target, particularly if the earnings beat streak continues.
The business has beaten consensus earnings estimates in each of the last four quarters, with an average quarterly beat of roughly 33 percentage points — a record of consistently under-promising and over-delivering that suggests management has reliable near-term visibility into underwriting results.
→StableEarnings
- Expectation
- Average EPS beat remains above 10% for at least 3 of the next 4 quarters.
CounterEarnings surprises in property and casualty insurance are often driven by favorable loss development, which is inherently variable; elevated catastrophe activity in concentrated geographies could reverse the beat streak quickly.
With roughly 61% of exposure concentrated in the top ten states — above the 60% level that marks elevated single-region risk — the business faces idiosyncratic regional tail risk: a sustained regional economic shock or elevated catastrophe activity in key states could cause outsized claims development that a more diversified insurer would absorb more readily.
→StableBear case
- Expectation
- Geographic concentration should fall below 55% over the next 12 months for the structural risk concern to meaningfully diminish.
CounterDeep presence in specific geographies can enable more precise actuarial pricing and stronger local distribution; the same concentration that creates tail risk may also generate above-average underwriting margins within those states.
The business converts free cash flow at 167% of net income and achieves a perfect 9 out of 9 financial health score — metrics that suggest the balance sheet is sound and reported earnings are backed by genuine cash generation.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 120% of net income over the next four quarters.
CounterIn insurance, free cash flow in excess of net income can reflect timing differences in claims reserves that reverse in higher-loss environments; a deterioration in the loss ratio would reduce both reported earnings and realized free cash flow simultaneously.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Horace Mann is a financially healthy specialty insurer with consistent earnings delivery and strong cash conversion, but geographic concentration above 60% in top states creates a hard structural risk barrier, and the stock has moved above its near-term price target — the quality is real but the setup favors patience for a better entry point.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.9 |
| ROA | 0.7 |
| Gross margin | 3.8 |
| Op margin | 5.6 |
| Net margin | 4.8 |
| Current ratio | 9.5 |
| FCF quality | 10.0 |
| Moat | 5.2 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 167% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 9/9
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.3 |
| EPS growth | 3.7 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.6 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.7 |
- ▸Overbought (RSI 88)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.5 |
| erm sentiment | 5.0 |
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $1,039,225 (0.048% of mkt cap)
Peer rank
3.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 3.4 |
| growth rank | 3.5 |
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.1 |
| support resistance | 0.4 |
| 52w position | 9.9 |
| gap | 5.0 |
Risk (lower is worse)
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 6.2 |
| volatility | 6.9 |
| implied vol | 4.9 |
| beta | 10.0 |
| debt equity | 8.4 |
- ▸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 | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 267.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.2=NEGATIVE
- FINSVC_REGIONAL_CLIFF:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.19
Upside
-17.9%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Binary industry: Insurance - Property & Casualty
Investment implication
The F-path SELL output reflects an overall score of 5.3 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:-1.2=NEGATIVE, FINSVC_REGIONAL_CLIFF:HARD_BLOCK) reinforce the read. Current asymmetry R:R is -1.19 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.8, Risk (lower is worse) at 7.4, and Catalyst at 7.0; the weakest are Peer rank at 3.0, Growth at 3.5, and Insider at 3.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -1.19 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 Consistency
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Geographic Concentration Structural Risk
Trip ifTop-ten-state geographic exposure falls below 55% in 2 consecutive annual disclosures.
- P3Attractive Valuation Forward Earnings
Trip ifForward P/E expands above 14 times for 2 consecutive quarter estimates.
- P4Strong Cash Conversion Balance Sheet
Trip ifFree cash flow conversion falls below 100% of net income for 2 consecutive quarters.
- P5Stock Above Target Unfavorable Geometry
Trip ifShare price corrects below $43 for 2 consecutive weeks.