Genworth Financial Poised to Be a Comeback Kid

Genworth Financial (GNW) has been featured on my blog Financial Tides, has been in my Jim Van Meerten/BarChart S&P 500 fund on Marketocracy for a few weeks and has been a great performer lately. GNW is a comeback story. Lately some of the rating agencies have given them a bad rap, but we know the poor record the rating agencies have had recently.

GNW is in the "Lifestyle Protection" business. That's the new fancy name for insurance that protects income: Life Annuities, Disability, Long Term Care and Life Insurance. It has some major competition in Allianz (AZ), ING, AIG & AXA. The whole industry is poised to make a comeback because of a flight from securities to safety and as the investment climate brightens so should GNW's bottom-line.

Why am I so high on GNW when the rating agencies aren't:

1 - GNW recently was awarded a BIG contract with the Teacher's Retirement Fund of Texas - one of the largest retirement funds in the US to provide Long Term care for its members.

2 - BarChart has it rated as a 96% BUY with 12 of its 13 technical indicators a BUY and only one hold.

3 - The stock has hit 10 new highs in the last 20 trading sessions for a monthly gain of 46%

Recommendation: BUY - presently trading at around 11 and I'd place a protective stop at its 50 Day Moving Average at 8. Move the stop up as the stock rises but sell if it trades below its 50 DMA.

Disclosure: I have no postions in GNW Genworth Financial at time of posting.

Comments

[mdpath:]

Why don't you have a position in GNW.

Sep 15 09:17 AM

[bluesky123:]

GNW has lost money for 5 consecutive quarters and is doing a $500m fund raising. Doesn't sound like a growth business to me.

Sep 15 10:06 AM

[Jim Van Mee...:]

I don't have a position in GNW because I never put recommendations on the internet for stocks I own. You will never, ever find me guilty of pump and dump.

Each day I try to find good investments. I can't buy all of them so I let you in on the ones I don't buy.

Sep 19 11:47 AM

[PublicAccou...:]

Mr. Meerten, you are following "the Heard/ Herd" mentality on GNW!
Cramer will soon be saying that Cramer- "stands corrected!" KPMG- Auditors will have to disclose on the GNW, that Earnings will be declining by the Congress' Passage of the Public LTC C.L.A.S.S. Act, and GNW's having to answer for their off-the-books entries of $1.8 billion, etc., etc. Your next release should be entitled:
"Genworth's Financials have become Humpty-Dumpty!- and all the Financial Talking Heads will be running for their own separate Door!
Trying to explain to their Readers why GNW has now had it's Egg Cracked, and cannot be put back together! Wait & See what their 3rd. Qtr Earnings 2009, looks like? GNW is scrabbling for Bucks just to pay their operating expenses after now 6 consecutive qtrs. of losses! Why did GNW' CEO Fraizer cancel the GNW Dividend?
Have you read their 2nd Qtr. 2009 Earnings Call and their 10-K 2008?I think not! It's called Accounting for Financial Statements, Coursed #101! Maybe you need such an Accounting Course? Since, GNW's 8-K's, 10-K's, etc. clearly disclose that your -"COMEBACK KID" comments are not "warranted!" Unless you read or have explained to you that GNW is poised for their soon "GNW-Fall from Grace!" Read GNW's SEC Financials! Which are now under SEC Filed Complaint Examinations, and additionally by the Texas Attorney General Greg Abbott! GNW is Humpty Dumpty!

Sep 21 05:38 AM

[stopnthink:]

The CEO gave himself 400,000 options the day he let 15% of the work force. Several of his direct reports received 50,000-100,000 options on Feb12th. This October several upper and senior management will get their retention bonuses paid out - equal to one years salary or $150-$250k each. The 1000 plus people laid off and the rank-and-file did not get any of these perks and frankly they are the ones to be thanked (along with the CFO) for the companies boost in stock price. How can a greedy management team propel this company to reach its potential? So far, it has had the opposite effect. While MDF was a GE person, in the recent layoffs, it felt like there was a persecution of GE professionals! Are you sure you put your faith in this management team?

Oct 04 10:44 PM