The National Security Group, Inc. (NASDAQ:NSEC) releases preliminary estimates of insured catastrophe losses from Hurricanes Sally and Delta along with updated estimates of catastrophe losses from Hurricane Laura incurred by property and casualty subsidiary National Security Fire & Casualty.

Hurricane Sally

On September 16, 2020, Hurricane Sally made landfall near Gulf Shores, Alabama as a category 2 storm. Hurricane Sally had maximum sustained winds of 105 mph at landfall and was the eighth tropical cyclone, in the 2020 Atlantic hurricane season, to impact the continental U.S.

Our pre-tax loss due to Hurricane Sally is expected to be $2,000,000, net of recoveries under our catastrophe aggregate reinsurance. Net of tax, Hurricane Sally will reduce our 2020 earnings by $1,580,000 and will reduce earnings per share by $0.62. The impact of Hurricane Sally will be reflected in our third quarter financial results. To date, we have had approximately 600 claims reported from Hurricane Sally with approximately 90% of total claims from this event incurred by our Alabama policyholders.

Based on our analysis of historical reporting patterns, preliminary post event model estimates and assessment of claims to date, we estimate our ultimate gross losses from Hurricane Sally to be in the range of $3,000,000 to $3,500,000. While we expect to recover $1,000,000 to $1,500,000 under our catastrophe aggregate reinsurance, based on our estimate of gross losses, we do not expect losses from Hurricane Sally to impact our primary catastrophe reinsurance coverage which is triggered once gross losses exceed $4 million from a single catastrophe event. This first layer of catastrophe reinsurance was reinstated for a second event following losses from Hurricane Laura.

Hurricane Laura – Revision to the Range of Estimated Gross Losses

We are revising our estimate of gross losses due to Hurricane Laura. This revision to gross losses (before reinsurance) is

The forward 4-quarter estimate for the S&P 500 returned to its familiar pattern of sequentially moving higher this week, printing $156.08 vs. $155.98 last week. A small increase – yes – but still sequential improvement

Here is a picture of what the spreadsheet looks like tracking the IBES data by Refinitiv:

What fascinates me is that since July 1, only two weeks of the last 16 have seen sequential declines in the forward estimate.

Geeky data “stuff” but numbers tell a story.

  • The forward 4-quarter estimate improved sequentially to $156.08 from last week’s $155.98.
  • The forward PE is 22x.
  • The S&P 500 forward earnings yield fell a little bit this week to 4.49% from 4.64% last week.
  • The “average” expected calendar 2020 and 2021 S&P 500 EPS growth fell to 3.5% this week, from a long string of 4% prints. Let’s see what the next few weeks hold.
  • The “expected” 2021 EPS of $166.22 is still above the 2019 actual EPS of $162.93.

S&P 500 Forward earnings curve:

This week, note the “4-week rate of change”. The sequential increases continued this week, which is always a plus.

Looking at Next 4 Quarters’ Earnings and Revenue Growth:

Showing the same data from various perspectives helps the reader see the y/y change in EPS and revenue growth for the S&P 500.

Sector data will follow tomorrow.

EPS growth for Q3 ’20, Q4 ’20 and Q1 ’21 continue to slowly improve.

Let’s see what this table looks like next week after 15 financials report and readers can see what consumer and commercial credit losses look like.

This blog will have more on the Financial sector over the weekend.

Summary/conclusion: This weekly overview on the S&P 500 numbers – both expected EPS and revenue growth – shows that the positive trends remain in place,

These UK shares are set to release fresh financial details over the next couple of weeks. Is now the time to buy in? Or should you give them a very wide berth?

Barclays

Imminent third-quarter financials from FTSE 100 banking colossus Barclays are bound to attract plenty of attention. This is a reflection of the blue chip’s standing in its own right as well as its role as a barometer of the health of the British economy. And I have to tell you that I’m not too optimistic over what they’ll show.

UK banks have already been forced to suck up gigantic impairments resulting from the Covid-19 crisis. Barclays itself announced it had booked £3.7bn worth of credit impairments in its half-year trading update in July. Profits at the bank sunk to £1.3bn between January and June from £3bn a year earlier, too. I fear another shocking set of numbers when that quarter three statement comes out on Friday, October 23.

I don’t think there’s much incentive to buy Barclays shares today. Its forward price-to-earnings (P/E) ratio of 20 times fails to reflect the possibility of its current travails stretching well into 2021 and possibly beyond, too. As well as Covid-19, of course, the Footsie bank also faces a significant threat from a disorderly Brexit at the end of December.

On top of this, Barclays and its peers also face the prospect that the Bank of England will hold interest rates at rock-bottom levels for years to come to support the UK economy. The central bank might even introduce negative rates soon if very-public chatter from key policymakers is to be believed. In my opinion Barclays simply offers too much risk. I fully expect its long-term share price downtrend to continue.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side.”Jesse Livermore

Anyone who follows the equity market realizes that they are faced with what I described last week as a foggy outlook in the near term. When that occurs, I try not to get swayed and then sidetracked into forgetting the long-term trends that are in place.

An investor has to be reactionary waiting for the market to give them clues, then reacting appropriately. I take my leads from price action, momentum, sentiment, and other indicators. All designed for me to decipher what the market is telling me. Never drifting too far from the one key that serves as the foundation of my current strategy. That is staying focused on the major trend that is in place, and that remains without question in favor of the bulls.

Once established that trend should be followed until there is evidence that a discernible change is taking place. This bull market has been marked by the masses that keep looking for reasons to abandon this trend. As each month passes, another reason is rolled out why the equity market is filled with more downside risk than upside gains.

Sentiment as a contrary indicator has been a tailwind for anyone bullish. Excessive bullishness would imply the exhaustion of buying power. What we have witnessed for quite some time is that traders and investors appear to be subdued and cautious. The new highs recorded for the S&P just one month ago and the 42 all-time highs recorded by the NASDAQ in 2020 should have given a boost to enthusiasm for equities. Instead, it is met with a yawn.

Major market tops simply do not occur with the amount of

Quick Take

InMed Pharmaceuticals (INM) intends to raise $10 million from the sale of common stock and warrants in an uplisting / Nasdaq IPO, according to an amended registration statement.

The company is developing cannabis-derived treatments for skin and eye conditions.

INM is still at a preclinical stage of development and is thinly capitalized; the IPO may be more suited to long-term hold institutional investors, so I’ll watch the IPO from the sidelines.

Company & Technology

Vancouver, Canada-based InMed was founded to advance drug programs for epidermolysis bullosa [EB], a skin condition that results in layers of skin not sticking to each other and for glaucoma, an eye condition that damages the optic nerve.

Management is headed by president and Chief Executive Officer Eric Adams, who has been with the firm since 2016 and was previously CEO at EnGene and held senior roles at QLT.

Below is a brief overview video of InMed’s recent announcement for treating EB:

Source: Business Television

The firm’s lead candidate is INM-755, a cannabinoid-based treatment candidate for epidermolysis bullosa.

The drug is current in Phase 1 safety trials and management expects it to advance to Phase 1/2 efficacy trials in 2021.

The company’s second candidate is INM-088, a cannabinoid treatment for glaucoma and management expects it to enter Phase 1 safety trials in 2021.

Below is the current status of the company’s drug development pipeline:

Source: Company S-1 Filing

Investors in the firm have invested at least $70 million.

Market & Competition

According to a 2019 market research report by Technavio, the global market for epidermolysis bullosa is expected to grow by nearly $305 million from 2019 to 2023.

This represents a forecast CAGR (Compound Annual Growth Rate) of almost 5% from 2019 to 2023, as shown in the chart below:

Key elements driving this