Five Solid Financial Stocks

Given the ongoing equity market volatility, particularly with financial stocks, NYSE-listed Aon Corp. (AOC), Assurant Inc. (AIZ), Willis Group Holdings Ltd. (WSH), StanCorp Financial Group Inc. (SFG), and National Financial Partners Corp. (NFP) offer a solid alternative for those who want to invest in the sector, according to Citigroup’s Keith Walsh. In a recent note to clients, the analyst highlighted these buy-rated names as his “best ideas” for 2008.

“Their fundamentals are strengthening and they have little or no balance sheet risk,” he said, noting catalysts like revenue growth, margin expansion and strong capital management.

Specifically, Assurant has benefited from subprime mortgage delinquencies via its creditor placed insurance lines, Mr. Walsh added.

The disciplined management teams of these companies was also highlighted as being crucial in times of elevated uncertainty and volatility.

Given the fears of a recession, Citigroup says it favors global insurance brokers due to their geographic diversity, larger share of recurring fee revenue, growing presence in the middle market, cost savings and improving cash flows.

AOC vs. AIZ vs. WSH vs. NFP vs. SFG 1-year chart:

Comments

[Kunst:]

On 1/14/08, I bought calls of Wells Fargo (WFC) for February at $30 and April at $35. The stock was selling for $28.21 at the time.

2008 Jan 16 02:06 AM