Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
National Interstate's Sloan Ratio for the quarter that ended in Sep. 2016 was 0.90%.
As of Sep. 2016, National Interstate has a Sloan Ratio of 0.90%, indicating the company is in the safe zone and there is no funny business with accruals.
National Interstate Sloan Ratio % Historical Data
The historical data trend for National Interstate's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of National Interstate's Sloan Ratio %
For the Insurance - Property & Casualty subindustry, National Interstate's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
National Interstate's Sloan Ratio % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, National Interstate's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where National Interstate's Sloan Ratio % falls into.
National Interstate Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
National Interstate's Sloan Ratio for the fiscal year that ended in Dec. 2015 is calculated as
National Interstate's Net Income for the trailing twelve months (TTM) ended in Sep. 2016 was 1.951 (Dec. 2015 ) + 6.84 (Mar. 2016 ) + 9.049 (Jun. 2016 ) + 9.773 (Sep. 2016 ) = $27.6 Mil.
National Interstate's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2016 was 10.769 (Dec. 2015 ) + 25.221 (Mar. 2016 ) + 18.769 (Jun. 2016 ) + 25.523 (Sep. 2016 ) = $80.3 Mil.
National Interstate's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2016 was -18.126 (Dec. 2015 ) + -43.704 (Mar. 2016 ) + 6.353 (Jun. 2016 ) + -15.528 (Sep. 2016 ) = $-71.0 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
National Interstate (NAS:NATL) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Sep. 2016, National Interstate has a Sloan Ratio of 0.90%, indicating the company is in the safe zone and there is no funny business with accruals.
National Interstate Sloan Ratio % Related Terms
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National Interstate (National Interstate) Business Description
National Interstate Corp was founded in 1989. The Company, together with its subsidiaries operates as an insurance holding company group that underwrites and sells traditional and alternative property and casualty insurance products to the passenger transportation, trucking and moving and storage industries, general commercial insurance to small businesses in Hawaii and Alaska and personal insurance to owners of recreational vehicles throughout the United States. It is a specialty property and casualty insurance company with a niche orientation and a focus on the transportation industry. It offers over 40 product lines in the specialty property and casualty insurance market, which it groups into four general business components, alternative risk transfer, transportation, specialty personal lines and Hawaii and Alaska based on the class of business, insureds' risk participation or geographic location. Alternative risk transfer underwrites, markets and distributes truck transportation, passenger transportation and moving and storage ART insurance products, also known as captives. Transportation underwrites commercial auto liability, general liability, physical damage, workers' compensation and motor truck cargo and related coverages for truck and passenger operators. Specialty personal lines offer coverage for campsite liability, vehicle replacement coverage and coverage for trailers, golf carts and campsite storage facilities. The Company offers its products through multiple distribution channels including independent agents and brokers, program administrators, affiliated agencies and agent internet initiatives. The Company competes with Lancer Insurance Company, RLI Corporation, Great West Casualty Company, Northland Insurance Company, Sentry Insurance, Progressive Corporation and National General Insurance, Liberty Mutual Insurance Company, First Insurance, Dongbu Insurance Company, DTRIC Insurance Company, Zurich Insurance Company, American International Group, Inc., Travelers Company, Inc.
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