Conclusion, Investment Implications, Strategy
Financial Sector constituent Horace Mann Educators (HMN) is currently amid favorable conditions for both outright strength and relative outperformance versus the S&P 500. A sustained rise above the $39.86 area would target an additional 16% rise to $48.50. This is an Asbury Momentum trade idea.
Analysis and Rationale
Horace Mann Educators Corporation (HMN), together with its subsidiaries, operates as an insurance holding company in the United States. It operates in three segments: Property & Casualty, Life & Retirement, and Supplemental & Group Benefits. The company underwrites and markets personal lines of property and casualty insurance, including personal lines auto and property insurance products; supplemental insurance products, which include cancer, heart, hospital, supplemental disability, and accident coverages; retirement products, such as tax-qualified fixed and variable annuities; and life insurance products comprising whole life and term, as well as indexed universal life insurance products. It also offers student loan solutions, including online student loan management accounts for educators. The company markets its products through its sales force of full-time exclusive agents to K-12 teachers, administrators, and other employees of public schools and their families. Horace Mann Educators Corporation was founded in 1945 and is headquartered in Springfield, Illinois.
The upper panel of Chart 1 below plots HMN daily since October 2021 along with its 200- and 50-day moving average, widely-watched major and minor trend proxies. The lower panel plots the daily relative performance of HMN versus the SPDR S&P 500 ETF (SPY) along with its 63-day (quarterly) moving average, the latter which identifies the Strategic trend of relative performance.
Chart 1
The green highs show that the relative performance line in the lower panel is HMN is rebounding from a Mar 29th test of its 63-day MA, which suggests HMN’s Jan 21st trend of Strategic relative outperformance versus the S&P 500 is resuming. Meanwhile, the upper panel shows that HMN is rebounding from a recent test of its 50-day MA at $40.51, which suggests its current minor uptrend is resuming. Combined, these metrics indicate a low risk/potentially high reward opportunity to buy HMN.
Risk/Reward
Table 1 below shows that, considering a $48.50 upside target and a protective stop placed below the $39.86 area, a long entry price of $42.00 would provide a 1:3.0 risk/reward ratio (risking $1.00 to make $3.00) with an initial risk of 5.1%.
Table 1
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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.