ING US - Unloved, Underappreciated, And Undervalued
Tim Travis • 23 Comments
Tim Travis • 23 Comments
Fri, Jun. 24, 11:58 AM
- The Too Big To Fail lenders are naturally among the day's big losers following the U.K. vote to leave the EU, but losses in the financial sector are wide and deep as - among other things - interest rates look to be a lot lower for a lot longer.
- Among asset managers, Invesco (IVZ -10.8%) - with a sizable U.K. exposure - is faring about the worst. WisdomTree (WETF -7.8%) takes a hit as the yen is the solo currency surging against the dollar, reducing demand for its popular hedged Japan ETF.
- It's wait till next year (or even 2018 if you believe short-term rate futures markets) for rate hikes, meaning regional lenders can't celebrate their passing of the Fed stress tests last night. Regions (RF -7.8%), KeyCorp (KEY -6.4%), PNC Financial (PNC -5.5%), U.S. Bancorp (USB -4.2%), BB&T (BBT -5.1%).
- Even lower rates put even more pressure on the business models of the life insurers: MetLife (MET -8.8%), Prudential (PRU -7.7%), Lincoln National (LNC -9.9%), Voya (VOYA -7%). Online brokers too: E*Trade (ETFC -9.4%), Schwab (SCHW -9.5%).
- ETFs: KRE, KBE, IAT, KBWB, QABA, KBWR, KRU, KRS, WDRW, DPST
Wed, May 4, 10:11 AM
- The company missed estimates by a mile thanks to alternative investment income - think hedge funds and private equity - that was $56M less than management expectations.
- Q1's volatility is old news, says BTIG's Mark Palmer, and - checking operations - he's not finding anything else of concern in the report. The individual life unit - the cause of a couple of recent earnings misses - posted a $6M Y/Y improvement in adjusted operating earnings to $49M.
- A sizable part of the Voya (VOYA -3.3%) bull case is capital returns, says Palmer, and the insurer took advantage of market weakness to buy back $220M in stock in Q1, leaving about $500M in its authorization.
- He retains his Buy rating and $50 price target (66% upside).
Thu, Feb. 11, 12:51 PM
- At the moment it's yet again looking like "wait till next year," for the sustained rise in interest rates the life insurers need to be able to earn some real money.
- Last night it was Prudential Financial (PRU -10.1%) joining MetLife (MET -4.7%) and Lincoln Financial (LNC -9.2%) in reporting a disappointing Q4, with investment results contributing $105M less this year that they did in Q4 of 2014.
- While still upbeat on the economic outlook, Janet Yellen is spending an uncomfortable amount of time in her Congressional testimony talking about negative interest rates, and a chart of Google searches for "negative interest rates" is through the roof.
- Manulife (MFC -10.3%), Sun Life (SLF -3%), Primerica (PRI -3.7%), Voya Financial (VOYA -4.6%)
- The 10-year Treasury yield is lower by 10 basis points to 1.6%, and short-term rate futures have begun pricing in a rate cut by the Fed.
Wed, Feb. 10, 9:41 AM
- With the stock trading at just 0.47x book value (ex. AOCI), any buybacks done under the new $700M plan will be highly accretive, says BTIG's Mark Palmer, reiterating his Buy rating and $50 price target.
- The fast pace of repurchases, says Palmer, is a key leg to the Voya (VOYA +1.3%) bull story - highlighting the consistent generation of excess capital and the company's willingness to return that money to owners.
- Voya has been hit particularly hard in the market selloff due to its perceived interest-rate sensitivity, but, says Palmer, the actual impact of lower rates is more than reflected in the stock price.
- Previously: Voya Financial boosts buyback by $700M (Feb. 10)
Nov. 4, 2015, 12:41 PM
- Though Retirement and Investment Solutions accounted for 78% of Voya Financial's (VOYA -3.8%) Q3 pretax operating income, it was a 2nd consecutive month of elevated mortality in the Individual Life unit which caused the sizable earnings miss, writes BTIG's Mark Palmer.
- The mortality ratio was more than two standard deviations above the expected level - the first time such an unfavorable variance has occurred since 2007, says management. The unit paid 35 claims of more than $1M during the quarter, totaling $65M. One year ago it paid 25 claims of more than $1M totaling $34M.
- Calling the miss an "actuarial blip," and the stock at just 0.7x book value very inexpensive, Palmer reiterates his Buy rating and $50 price target.
- Previously: Voya Financial misses by $0.09, misses on revenue (Nov. 4)
Aug. 5, 2015, 12:00 PM
- Q2 after-tax operating earnings of $179M or $0.78 per share v.s $213M or $0.83 one year ago. Ongoing business adjusted operating earnings of $319M vs. $346M.
- Retirement operating earnings of $128M down 6% Y/Y. Annuities operating earnings of $61M down 5%. Investment management operating earnings of $47M down 15%. Individual life operating earnings of $38M down 40%. Employee benefits operating earnings of $38M flat.
- 2.77M shares bought back during quarter at an average price of $46.22 each, or total of $128M. Book value per share rises to $56.33 from $54.88.
- Previously: Voya Financial misses by $0.05, misses on revenue (Aug. 5)
- VOYA -2.7% to $45.26.
Jun. 2, 2015, 1:04 PM
- The previous operating ROE target for 2018 of 13-14% is boosted by 50 basis points at both ends.
- The company lifts its buyback authorization by $750M, bringing the total to $808M. Voya (VOYA +1.1%) made $72M in buybacks during April and May.
- The company's investor day is just getting underway. Presentation slides are here.
Apr. 17, 2015, 9:42 AM
Mar. 4, 2015, 10:32 AM
- ING Group (ING -0.8%) sells 32M shares of Voya Financial (VOYA +0.5%) in a public secondary offering at $44.20 each, and Voya agrees to purchase another 13.6M shares directly from ING for $44.12 each.
- The direct purchase will leave Voya with $161M remaining under its buyback authorization.
- The sales complete ING's divestment of Voya Financial. ING first entered the U.S. life insurance market forty years ago with the purchase of Wisconsin National Life.
- Previously: ING unloading the rest of its Voya stock (March 3)
Jan. 27, 2015, 5:35 PM
Jan. 6, 2015, 3:30 PM
- It's been a rough start to the year for the group as investors - who had bid up the names at least partly in hope of higher interest rates giving a boost to returns - rethink those assumptions yet again as the 10-year Treasury yield tumbles below 2%.
- MetLife (MET -2.5%), Prudential (PRU -1.5%), Manulife (MFC -2.2%), Sun Life (SLF -3.2%), Lincoln National (LNC -2.8%), Primerica (PRI -1.5%), Voya Financial (VOYA -2.1%).
Nov. 13, 2014, 9:07 AM
- ING Group sells 30.03M shares of Voya Financial (NYSE:VOYA) to the underwriters at $39.15 each (Voya receives no proceeds from the sale), and, in connection, Voya agrees to buy back 4.47M shares directly from ING for the same price per share (total of $175M).
- In total ING is selling 34.5M shares, bringing its stake in Voya down to 19% from 32.5%. After Voya's purchase from ING, it will have about $11M remaining in its repurchase authorization.
- VOYA -2.1% premarket to $39.15. ING -0.2%
- Previously: ING selling another 34.5M shares of Voya Financial
Nov. 12, 2014, 4:43 PM
- The sale comes in two parts, with Voya (NYSE:VOYA) agreeing to buy $175M of its stock directly from ING Group, and the rest to be sold in a public offering. The price of the public offering will set the price for Voya's private purchase.
- The sale will bring ING's stake in Voya down to 19% from 32.5%.
- VOYA -1.2% after-hours
Sep. 17, 2014, 3:16 PM
- Leading markets higher as the reality of higher interest rates gets nearer is the financial sector (XLF +0.9%). Whether its banks, brokerages, or insurers, a higher benchmark rate for some time has been considered a key bullish catalyst. An especially large move is being seen in the online brokerage names who have been forced to forego money market fees for years thanks to ZIRP: E*Trade (ETFC +3%), Schwab(SCHW +3.2%), Ameritrade (AMTD +2%).
- Morgan Stanley (MS +1.8%), Bank of America (BAC +1.2%), JPMorgan (JPM +0.9%)
- U.S. Bancorp (USB +1.1%), Regions Financial (RF +2%), New York Community Bank (NYCB +0.8%), Huntington Bancshares (HBAN +1.3%), KeyCorp (KEY +1.3%)
- MetLife (MET +0.6%), Voya Financial (VOYA +0.7%).
- Chubb(CB +0.4%), AIG (AIG +1.1%), Hartford (HIG +0.8%)
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, KBWP, RYF, KBWI, KRS, FINZ
May 21, 2014, 8:14 AM
- Voya Financial (VOYA) is up 0.7% premarket after being added to the U.S. Focus List at Credit Suisse, the team citing underappreciated excess capital and free cash flow generation.
May 7, 2014, 3:32 PM
- Looking closely into the 8-K from Voya's (VOYA -2.9%) mid-March secondary offering, analyst Mark Palmer notes the company tipping off Q1 seasonality resulting in lower revenues and higher expenses, and that 2014 would be no different. In particular, says Palmer. Voya pointed to higher administrative expenses such as payroll taxes and audit fees, higher loss ratios in group life, and lower income on alternatives. Take advantage of selloff to get long, advises Palmer.
- Previously: ING U.S. misses by $0.08, misses on revenue
- Previously: Voya higher on BTIG upgrade
- Previously: More on VOYA Q1 results
Voya Financial, Inc. is a retirement, investment and insurance company serving the financial needs of individual and institutional customers. The company operates through folloeing segments: Retirement, Annuities, Investment Management and Individual Life. The Retirement provides an insurance... More
Country: United States
Other News & PR