Aflac: The Duck Bounces Back

I like this stock. I really do:

Aflac Inc. (AFL), the world’s largest seller of supplemental health insurance, said third-quarter profit more than tripled as investment losses narrowed and a stronger yen magnified revenue from Japan.

Net income rose to $363 million, or 77 cents a share, from $100 million, or 21 cents, in the same period a year earlier, the Columbus, Georgia-based insurer said Wednesday in a statement. Operating income, which excludes some investment results, was $1.25 a share, beating the $1.20 average estimate of 17 analysts surveyed by Bloomberg. The stronger yen boosted quarterly profit by 9 cents a share, Aflac said.

Aflac, which gets most of its revenue from Japan, is counting on earnings there and in the U.S. to support capital as the recession pressures the value of investments held to back policies. Chief Executive Officer Daniel Amos is diversifying holdings to reduce potential losses from defaults. Realized investment losses in the third quarter shrank 42% to $226 million from a year earlier, Aflac said today.

“They’re still working through some of their issues, but the results look pretty impressive,” said Bill Smead, who helps manage $160 million, including Aflac shares, as chief investment officer of Seattle-based Smead Capital Management. “It’s the beginning of a long process” of improving earnings.

So I guess the world wasn't really going to end for them a few months ago. My only concern is that I didn't load up when the shares were at $11.

The CEO said the company is on track to make $4.75 to $4.83 a share this year and the objective is to grow earnings 9% to 12% next year. That's roughly $5.20 to $5.40 a share. Not bad for a stock going for $42.

Comments

[Graham and ...:]

"Load up when the shares were at $11." That's the kind of thing Warren Buffett would have done, at least with GEICO. But then, you and I aren't Buffett.

Oct 30 03:49 PM

[granger:]

Very nice!

I did not wake up until $20, but loaded up between 17-20 area. have trimmed slightly to cover some of my costs and lock in a profit. But whats left is going in the vault for many years, hopefully decades.

Again, very nice on that $11 area, that's beautiful.


On Oct 30 03:49 PM Graham and Dodd Investor wrote:

> "Load up when the shares were at $11." That's the kind of thing Warren
> Buffett would have done, at least with GEICO. But then, you and I
> aren't Buffett.

Oct 31 12:46 AM