- The company recently reported its Q2 2014 results, which showed continued improvement across the business, besides U.S. Long Term Care, where significant adverse losses were experienced.
- There is still plenty to like about Genworth, mainly the company's outstanding leadership and leading position in various insurance markets, particularly U.S. LTC where the company has >40% market share.
- The adverse LTC losses have resulted in another review of the business, the results of which will be released prior to Q3 results and could include significant value impairments.
- Valuing LTC and the rest of the business separately based on a range of potential outcomes, I came up with a weighted average price target of $16.06 or 19% upside.
- This also accounts for additional 8-10% annualized returns. It seems attractive on average, but an estimated 35% chance of substantial permanent capital loss is outside my risk profile.