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.
As of Dec. 2023, Selective Insurance Group has a Sloan Ratio of 2.48%, indicating the company is in the safe zone and there is no funny business with accruals.
Selective Insurance Group Sloan Ratio % Historical Data
* 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 Selective Insurance Group's Sloan Ratio %
For the Insurance - Property & Casualty subindustry, Selective Insurance Group'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.
Selective Insurance Group's Sloan Ratio % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Selective Insurance Group's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Selective Insurance Group's Sloan Ratio % falls into.
Selective Insurance Group 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.
Selective Insurance Group's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Selective Insurance Group's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 92.574 (Mar. 2023 ) + 58.608 (Jun. 2023 ) + 89.208 (Sep. 2023 ) + 124.848 (Dec. 2023 ) = $365 Mil.
Selective Insurance Group's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 135.769 (Mar. 2023 ) + 157.877 (Jun. 2023 ) + 228.66 (Sep. 2023 ) + 236.602 (Dec. 2023 ) = $759 Mil.
Selective Insurance Group's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -98.238 (Mar. 2023 ) + -155.326 (Jun. 2023 ) + -216.463 (Sep. 2023 ) + -216.328 (Dec. 2023 ) = $-686 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.
Selective Insurance Group (NAS:SIGI) 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 Dec. 2023, Selective Insurance Group has a Sloan Ratio of 2.48%, indicating the company is in the safe zone and there is no funny business with accruals.
Selective Insurance Group Sloan Ratio % Related Terms
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Selective Insurance Group (Selective Insurance Group) Business Description
Selective Insurance Group Inc is a regional property-casualty insurer based in New Jersey, with its operations focused in the New York metropolitan area. Since 1977, Selective has focused its sales efforts on small businesses, offering commercial products that include workers' compensation, general liability, property, and auto insurance. Selective also has a small personal insurance segment (under 20% of total premiums), selling auto and homeowner's coverage.
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