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After nearly a two-week correction, there are many cheap stocks in the market, but one of the cheapest sectors is insurance. The insurance stocks are trading well below book value and for a price to earnings multiple that is well below the market. This combination could be a perfect set up, leading to big gains for long term investors. Mark Luschini, the chief investment officer for Janney Montgomery Scott, was recently interviewed by Barrons.com, and had these comments about the insurance stocks:

With the market in a broad selloff, strong companies are being thrown in with the weak, and investors may not get a chance to buy them at these levels again for awhile .... Their valuations haven’t been this attractive since 2008.

Here's a closer look at insurance stocks that appear highly undervalued at this time.
Metlife, Inc. (NYSE:MET) provides a wide range of insurance products including: Annuities, group life insurance, supplemental life products, individual life insurance products, etc. Only about two weeks ago, this stock was regularly trading for $40 per share and looks oversold at only $33 per share.
Here are some key points for MET:
Current share price: $33.26
The 52-week range is $31.62 to $48.72
Earnings estimates for 2011: $5.22 per share
Earnings estimates for 2012: $5.84 per share
Annual dividend: 74 cents per share, which yields 2.2%
Book value: $50.42 per share
Prudential Financial (NYSE:PRU) offers a variety of insurance products including annuities, life insurance, dental insurance and more. Prudential shares were trading around $60 to $64 per share and have come down close to 52-week lows recently. Now the stock trades for about 7 times earnings and well below book value.
Here are some key points for PRU:
Current share price: $50.95
The 52-week range is $47.37 to $67.52
Earnings estimates for 2011: $6.84 per share
Earnings estimates for 2012: $7.82 per share

Annual dividend: $1.15 per share, which yields 2.2%
Book value: $71.79 per share

Hartford Financial Services (NYSE:HIG) is a leading insurance company and also offers other financial products in the US and globally. Recently, Hartford announced that second quarter profits would be well below expectations due to asbestos litigation and losses from major storms. This lower than expected profit has caused the shares to drop and has created a great buying opportunity for longer term investors.

Here are some key points for HIG:
Current share price: $19.87
The 52-week range is $18.81 to $31.08
Earnings estimates for 2011: $3.71 per share
Earnings estimates for 2012: $4.02 per share
Annual dividend: 40 cents per share, which yields 1.6%
Book value: $45.93 per share

Genworth Financial, Inc. (NYSE:GNW) is a leading insurance and financial services company. Genworth has been impacted by losses with mortgage insurance and this will continue to weigh on results, however, the worst might be priced in by now with the stock trading at about 5 times 2012 earnings and for only a fraction of book value.

Here are some key points for GNW:

Current share price: $6.40

The 52-week range is $5.26 to $16.10
Earnings estimates for 2011: 90 cents per share
Earnings estimates for 2012: $1.61 per share
Annual dividend: None
Book value: $28.67 per share
MGIC Investment Corporation (NYSE:MTG) is a financial services company offering mortgage insurance. The housing crisis has had a very negative impact on the financial results at this company and the shares have dropped over 50% recently.
Here are some key points for MTG:
Current share price: $2.17
The 52-week range is $1.87 to $4.36
Earnings estimates for 2011: Loss of 93 cents per share
Earnings estimates for 2012: Profit of 79 cents per share
Annual dividend: None
Book value: $7.52 per share
Phoenix Companies, Inc. (NYSE:PNX) offers annuities and life insurance products in the United States. This company is facing some challenges such as slow sales but it has a book value of nearly 4 times the current stock price. This is a higher risk, higher reward stock. It's possible a larger insurance company could have an interest in buying Phoenix in the future.

Here are some key points for PNX:
Current share price: $1.94
The 52-week range is $1.54 to $2.86
Earnings estimates for 2011: 42 cents per share
Earnings estimates for 2012: 39 cents per share
Book value: $9.86 per share
Disclosure: I am long HIG.
Source: 6 Insurance Stocks for Bargain Lovers