Is Trupanion Stock A Good Investment Right Now? - CMC Markets

Investment

Is Trupanion Stock A Good Investment Right Now? – CMC Markets

Published

3 years ago

November 9, 2020

Trupanion (NASDAQ: TRUP) was founded in 1999 by current CEO Darryl Rawlings, 15 years after coming up with the idea following the death of his dog. Rawlings’ goal was to “create a company that was valuable to pet owners, their pets, and veterinarians,” and that company is now Trupanion. But are there enough people willing to insure their pooches and feline friends to make Trupanion a compelling investment?

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The bull case for Trupanion

Trupanion estimates that its total addressable market is $32.7 billion and the number of pets with insurance in the U.S. and Canada is under-penetrated at roughly 1% and 2% respectively. Comparing this to 40% in Sweden, there is a large runway for growth, with the number of pets enrolled by Trupanion currently standing at 804,251. According to a report by the North American Pet Health Insurance Association, since 2015, the annual growth rate of insured pets has been 15.8%, demonstrating the ever-growing market.

Trupanion has reported revenue growth of above 20% for over ten years. In the most recent quarter, Q3, Trupanion increased revenue by 31% YoY to $130.1 million. This growth was driven by a 15% increase in enrolled pets and a 20% increase in subscription revenue. It also boasts an impressive monthly retention rate of 98.6%. Trupanion continues to invest internally with 45% internal return in the last quarter, and management expects these high rates of return to continue.

Trupanion has partnered with over 2,300 veterinary hospitals and over 10,000 veterinarians, which is vital as this helps to increase referrals. Trupanion also has software in many veterinary clinics which allows for claims to be paid in minutes and minimizes friction, differing from traditional insurance companies where claims would be reimbursed at a later date. In clinics where there is software installed veterinarians may be more inclined to push the product and recommend it. Increased referrals, coupled with growing average revenue per-user, will help to fuel growth in the coming years.

The bear case for Trupanion

Larger insurance companies could be considered the greatest threat to Trupanion, and if the pet insurance market continues to expand, it’s likely more of the larger players will enter the space. However, Trupanion has managed to navigate this threat thus far and is the market leader in the space with a sole focus on pet insurance. One could argue that its brand name and integration with veterinary hospitals differentiate itself from competitors, and acts as a competitive advantage.

Another risk that investors must take into account is whether or not the penetration rates in the U.S. will reach the levels of other markets. The worst-case scenario is that the penetration rates will stagnate or decline. If the opposite occurs, we could be looking at a company with room to grow many times over. However, it reported a net loss of $2.6 million compared to a net income of $0.8 million a year prior. The ability to consistently produce a profit remains a question mark that investors should keep an eye on but must take into account that it continues to invest heavily.

So, should I be watching Trupanion stock?

Investors need to weigh up the potential for growth with the risk that insurance penetration in the U.S. and Canada may not reach the same level as other countries. This company does appear to have many of the attributes that we look for, such as a founding CEO and significant market opportunity, among others. Trupanion could be a great addition to a diversified portfolio and could provide outstanding returns if it continues to grow at the pace that management is targeting.

Quickfire round:

When did Trupanion IPO?

Trupanion went public in 2014.

What is its market cap?

Its market cap is approximately $3 billion

Does Trupanion pay dividends?

Trupanion doesn’t pay dividends and is unlikely to in the future.

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Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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Everton search for investment to complete 777 deal – BBC.com

Published

1 hour ago

April 23, 2024

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Shamoon Hafez

BBC Sport football news reporter

@ShamoonHafez

2 hours ago

Everton are searching for third-party investment in order to push through a protracted takeover by 777 Partners.

The Miami-based firm agreed a deal to buy the Toffees from majority owner Farhad Moshiri in September, but are yet to gain approval from the Premier League.

On Monday, Bloomberg reported the club’s main financial adviser Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line.

BBC Sport has been told this is “standard practice contingency planning” and the process may identify other potential lenders to 777.

Sources close to British-Iranian businessman Moshiri have told BBC Sport they remain “working on completing the deal with 777”.

It is understood there are no other parties waiting in the wings to takeover should the takeover fall through and the focus is fully on 777.

The Americans have so far loaned £180m to Everton for day-to-day operational costs, which will be turned into equity once the deal is completed, but repaying money owed to MSP Sports Capital, whose deal collapsed in August, remains a stumbling block.

777 says it can stump up the £158m that is owed to MSP Sports Capital and once that is settled, it is felt the deal should be completed soon after.

Warren Buffett Predicts 'Bad Ending' for Bitcoin — Is It a Doomed Investment? – Yahoo Finance

Published

2 hours ago

April 23, 2024

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Currently sitting in sixth on Forbes’ Real-Time Billionaires List, Berkshire Hathaway co-founder, chairman and CEO Warren Buffett is a first-rate example of an investor who stuck to his core financial beliefs early in life to become not only a success but a once-in-a-lifetime inspiration to those who followed in his footsteps.

One of the most trusted investors for decades, the 93-year-old Buffett isn’t shy to pontificate on his investment philosophy, which is centered around value investing, buying stocks at less than their intrinsic value and holding them for the long term.

He’s also quite vocal on investments he deems worthless. And one of those is Bitcoin.

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Buffett’s Take on Bitcoin

Over the past decade, it’s been clear that the crypto craze isn’t something Buffett wants any part of. He described Bitcoin as “probably rat poison squared” back in 2018.

“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said in 2018. And his stance hasn’t wavered since. According to Benzinga, Buffett believes that cryptocurrencies aren’t a viable or valuable investment.

“Now if you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” Buffett said at the Berkshire Hathaway annual shareholder meeting in 2022.

Although the Oracle of Omaha has his misgivings about the unpredictable investment, does that mean crypto is doomed as an investment? Not necessarily.

For You: 10 Valuable Stocks That Could Be the Next Apple or Amazon

Is Buffett Wrong About Bitcoin?

Bitcoin bulls argue that while it’s not government-issued, cryptocurrency is as fungible, divisible, secure and portable as fiat currency and gold. Because they occupy a digital space, cryptocurrencies are decentralized, scarce and durable. They can last as long as they can be stored.

Crypto boosters continue to predict massive growth in the coin’s value. Earlier this year, SkyBridge Capital founder and former White House director of communications Anthony Scaramucci told reporters that Bitcoin could exceed $170,000 by mid-2025, and Ark Invest CEO Cathie Wood predicts Bitcoin will hit $1.48 million by 2030, according to Fortune.

“They really don’t understand the concept and the whole history of money,” Scaramucci said of crypto critics like Buffett on a recent episode of Jason Raznick’s “The Raz Report.” Because we place a value on “traditional” currency, it is essentially worthless compared with the transparent and trustworthy digital Bitcoin, Scaramucci said.

Currently trading around the $66,000 mark, Bitcoin is up nearly 50% in 2024. This means it’s massively outperforming most indexes this year, including the S&P 500, which is up about 6% in 2024.

Although Berkshire Hathaway has invested heavily in Bitcoin-related Brazilian fintech company Nu Holdings, which has its own cryptocurrency called Nucoin, it’s possible Buffett will never come around fully to crypto, despite its recent surge in value. It’s contrary to the reliable investment strategy that has served him very well for decades.

“The urge to participate in something where it looks like easy money is a human instinct which has been unleashed,” Buffett said. “People love the idea of getting rich quick, and I don’t blame them … It’s so human, and once unleashed you can’t put it back in the bottle.”

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This article originally appeared on GOBankingRates.com: Warren Buffett Predicts ‘Bad Ending’ for Bitcoin — Is It a Doomed Investment?

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Ping An Profit Falls as Market Declines Hurt Investment Returns – BNN Bloomberg

Published

7 hours ago

April 23, 2024

(Bloomberg) — Ping An Insurance (Group) Co.’s profit dropped 4.3% in the first quarter as stock-market declines and falling bond yields eroded investment returns.

Net income fell to 36.7 billion yuan ($5 billion) in the three months ended March 31, from 38.4 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Tuesday.

Operating profit, which strips out one-time items and short-term investment volatility, fell 3%.

China’s stock market rout at the start of the year and lower bond yields have weighed on insurers’ investment returns. They hurt profit even as more customers seek to buy savings products. Co-Chief Executive Officer Michael Guo said last month that profitability will recover after a 23% drop in net income last year.

“China’s macroeconomy gradually recovered in the first three months of 2024, but there were still challenges,” the company said in a statement, citing weak domestic demand. “In response to volatile capital markets and declining treasury yields, Ping An continued to pursue long-term returns through cycles via value investing.”

Read More: Ping An Trust Wins First Court Ruling Over Delayed Trust Product

Net investment yield of insurance funds dropped to 3%, the statement said, down from 3.1% a year earlier. Real estate investments fell to 4.2% of the 4.9 trillion yuan portfolio, from 4.6% the year earlier.

The CSI 300 Index slumped as much 7.3% this year through the start of February, before government intervention fueled a rally.

New business value, which gauges the profitability of new life policies sold, rose 21% in the first quarter. That followed a 36% jump last year as the company’s efforts to improve the productivity of life agents started to bear fruit. NBV per agent jumped 56% from a year earlier, the statement said.

Ping An shares rose 3% to HK$33.00 in Hong Kong trading on Tuesday, trimming the year’s loss to 6.7%.

(Updates with company comment in fifth paragraph, more details afterwards)

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