Aug. 14, 2014, 10:07 AM
Jul. 30, 2014, 5:16 PM
Jun. 4, 2014, 10:28 AM
- The life insurance sector mostly in the green after Dai-ichi purchases Protective Life for nearly 1.7x March 31 book value (excluding AOCI).
- Not exactly take-out candidates, MetLife (MET +2.5%) trades for 1.1x book and Prudential (PRU +2.5%) at 1.4x book. Lincoln National (LNC +1.9%) - with a market cap of $13.4B - trades for 1.1x book.
- Others: Primerica (PRI +0.5%), Kansas City Life (KCLI +0.5%).
- Previously: Dai-ichi snaps up Protective Life
May. 22, 2014, 9:18 AM
May. 15, 2014, 11:43 AM
- Hit particularly hard in today's selloff are the life insurers, whose hopes of beginning to get better returns on their fixed-income investments in 2014 look dashed at the moment.
- Off another six basis points today to 2.48%, the 10-year Treasury yield - above 3% at the start of this year - is all the way back to levels seen last summer.
- Leading the decline is Lincoln National (LNC -6%). Others: MetLife (MET -3.2%), Prudential (PRU -3.7%), Protective Life (PL -3.8%).
- Related ETFs: KIE, IAK, KBWP, KBWI
- Previously: Strong economic data doesn't slow Treasury rally; Wal-Mart in focus
Apr. 30, 2014, 5:28 PM| 1 Comment
Apr. 16, 2014, 3:18 PM
- Alongside Barclays' Jay Gelb's upgrade of Lincoln Financial (LNC +2.3%) to Overweight is a downgrade of Reinsurance Group of America (RGA -0.3%) to Equal Weight and cut in the price target to $81 from $88, citing increased competition in the life reinsurance market.
- For Lincoln, Gelb has boosted confidence in the company's ability to generate strong earnings growth despite the low interest rate environment.
- His top picks in the sector remain Prudential (PRU +1.6%), MetLife (MET +0.8%), Aflac (AFL +1.5%), and Protective Life (PL +1.2%), and he has a "positive outlook" on AIG and Hartford Financial (HIG +1.4%).
- "AFL has a top-tier ROE as well as robust share buybacks, and should benefit in 2015 from the Japan Post partnership," writes Gelb, noting yen weakness will hurt GAAP earnings, but the company has hedged profit repatriation back to the States. AIG and HIG, he says, "should deliver substantial share buybacks along with attractive valuations and ultimately higher ROEs."
- ETFs: KIE, IAK, KBWI, KBWP
Apr. 16, 2014, 1:06 PM
- Ahead the most in a green life insurance sector today is Lincoln National (LNC +1.7%) after its 2nd upgrade in 3 sessions, with Barclays today upgrading to Overweight.
- Monday: RayJay boosts LNC to Strong Buy.
- A high-flier in 2013 along with many life insurance names - partly on hopes for increased earning power from higher interest rates - Lincoln is off more than 10% in the last month amid a general pullback in the market and the idea that rates may be staying lower for longer.
Apr. 14, 2014, 7:25 AM
- Its hopes for higher interest rates dashed for the moment, the insurance sector hasn't escaped the recent market sell-off, but Raymond James is stepping in to buy the dip on a couple of names, upgrading Lincoln National (LNC) to Strong Buy and Principal Financial Group (PFG) to Outperform.
- On Friday, Principal Financial was boosted to Equal Weight from Underweight at Evercore.
Mar. 20, 2014, 10:54 AM
- Much of the financial sector is lit up bright green, continuing to outperform following yesterday's suggestion by the FOMC and Janet Yellen that rate hikes could come sooner than expected. XLF +1.1%, KBE +1.6%, KRE +1.6%.
- At new 52-week or even multi-year highs are JPMorgan (JPM +2.3%), Wells Fargo (WFC +1.7%), Morgan Stanley (MS +1.4%), and Bank of America (BAC +1.6%).
- Regional lenders: U.S. Bancorp (USB +1%), Huntington (HBAN +1.5%), PNC (PNC +1.3%), BB&T (BBT +1.5%), Fifth Third (FITB +1.8%), First Niagara (FNFG +2.1%).
- Leading among the life insurers are Lincoln National (LNC +1.9%), Protective Life (PL +1.6%), Manulife (MFC +1.2%), and Sun Life (SLF +1.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KRU, RWW, KBWR, RYF, PSCF, KBWI, KBWP, KRS, FINZ
Mar. 19, 2014, 3:13 PM
- A check of sectors following the FOMC statement and updated projections suggesting a quickened pace of rate hikes in the future finds the banks and life insurers notably moving higher. Both groups have struggled earning a spread amid ZIRP and are positively levered to higher rates.
- Lenders: Bank of America (BAC +1%), Citigroup (C +1%), JPMorgan (JPM), Regions (RF +1.7%), KeyCorp (KEY +0.9%), SunTrust (STI +0.7%).
- Life insurers: MetLife (MET +1%), Prudential (PRU +0.7%), Lincoln National (LNC +1%).
- Related ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, KIE, SEF, IYG, IAK, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, KBWP, KBWI, FINZ, KBE, KRE
- Not necessarily positively levered to higher rates are the mortgage REITs (REM -1.6%): Annaly (NLY -1.8%), American Capital (AGNC -1.7%), (MTGE -1.9%), Armour (ARR -1.3%), Two Harbors (TWO -2%) CYS Investments (CYS -3.3%), Capstead (CMO -1.3%), MFA (MFA -1.8%).
- Related ETFs: MORT, MORL
Mar. 8, 2014, 9:33 AM
- "MetLife (MET) is one of the cheaper stocks in a sector that is, itself, cheap relative to the market," says Eric Hagemann, an analyst at Richard Pzena's Penza Investment Management (an owner of the shares). A check of price/book (excluding investment gains) finds Met at 1.1x - grouped with Hartford (HIG) at 0.9x and Lincoln Financial (LNC) at 1.1x - but well less than Prudential's (PRU) 1.6x.
- Why the discount? Met is one of few remaining large financials not yet buying back any stock as it awaits direction from D.C. (which isn't expected until late this year or early next). In same boat, AIG and Prudential have both thrown caution to the wind and begun repurchases.
- On the other hand Met has boosted its dividend to $1.10 per share annually and the payout could approach $1.50 in 2015. There was also last year's $2B acquisition of Chilean pension fund provider Provida. If the new regulatory capital rules are too onerous, a breakup of Met into domestic and international businesses is a possibility.
- "In a record stock market, MetLife offers a nice package for investors: a rock-bottom P/E and price/book ratio, an attractive global franchise, and a financially astute management team," writes Andrew Bary.
Mar. 7, 2014, 9:42 AM
- The life insurers open strongly in the green as interest rates shoot higher following this mornings jobs report. Up the most is Prudential (PRU +3%) after BAML upgrades to Buy and boosts the price target to $103 from $94.
- The team views PRU's valuation as attractive after its sluggish start to the year - off 6% vs. a 1% increase in the median life name. There's also increased confidence the company can sustain an ROE above 14%, and a rising equity market means a lower cost of capital for the industry.
- Noting PRU's status as a SIFI, BAML takes a conservative view towards buybacks, assuming just $500M over the next five quarters. "However, we would not be surprised if PRU continued its current $1B a year pace of buyback, which we believe would help support the ROE."
- Others: MetLife (MET +2.1%), Lincoln National (LNC +2.2%), ING U.S. (VOYA +1.1%), Protective Life (PL +1.3%).
Feb. 25, 2014, 8:03 AM| Comment!
Feb. 5, 2014, 4:44 PM
- Lincoln National Corporation (LNC): Q4 EPS of $1.40 beats by $0.12.
- Revenue of $3.12B (+7.2% Y/Y) beats by $40M.
Feb. 5, 2014, 12:10 AM
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