HIG: I'll take a few shares of the Hartford.
I like that p/tangible bv is $25.44/$43.55 (bv from SI financials) = .58. And that p/e is low:
finance.yahoo.com
I like that the company's been around a long time (since 1810), is a Fortune 100 company, has brand recognition, and operates in several countries.
I don't like that there's no consistent growth in stated bv, that the company seems poorly managed ("Hartford...announced a $73 million after-tax charge on the write-off of costs tied to a discontinued software project"), and that the company's website doesn't seem user-friendly to me as an investor.
From Archie MacAllaster in Barron's Midyear Roundtable:
"Hartford Financial Services [HIG] is selling for 25. It pays a 40-cent dividend. The stock's 12-month range is 31.08 to 18.81. The company earned $1.16 in the first quarter, versus estimates of 95 cents. Hartford could earn more than $4 for the full year and at least $4.50 for 2012. The stock is trading for 5.7 times my 2012 estimate. Book value is more than $45 a share. Hartford sells property and casualty and life insurance, and the company is 200 years old. They cut the dividend sharply during the recession but doubled it this year. It wouldn't surprise me to see it double again, to 80 cents a share. The stock yields 1.5%. The company has $320 billion in assets, and there are 445 million shares outstanding. My target price is at least book value, and 75% above the current market value."
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From Gene Marcial's Forbe's column, interviewing Stanley Nabi, Vice Chairman and Chief Investment Strategist at Silvercrest Asset Management. (I don't know Silvercrest. As an fyi, here's a write-up on them:http://www.silvercrestgroup.com/documents/Built_on_Success_Silvercrest.pdf)
“Insurance is the cheapest sector in the market today,” asserts Nabi. His top choices in the group are Hartford Financial Services (HIG), one of the largest U.S. multi-line insurance holding companies and a leading property-and-casualty insurer, and Prudential Financial (PRU), which provides a wide range of insurance, investment management, and other financial products and services.
Both stocks are trading at a discount to their robust book values, notes Nabi, whch make them even more attractive.
Hartford, for example, is trading at just $25 a share although it has a book value of $45 a share. It is expected to earn $4 in 2011 and $4.40 in 2012, up from 2010’s $2.49. And Prudential, now at $61 a share, sports a higher book value of $70 a share. Nabi forecasts it will earn $6.75 a share in 2011 and $7 in 2012, up from 2010’s $5.73. Both insurers have structured their portfolios in a way that they would avoid getting hurt by a possible rise in interest rates.
Nabi isn’t too concerned about much of what concerns many investors.
“Despite the multitude of uncertainties, both domestic and global, we remain persuaded that current stock prices in the U.S. adequately discount the most pressing risks,” says Nabi.
His forecast calls for a record high for the Standard & Poor’s 500 index, implying a total return of at least 20% within the next 12 to 18 months “as the current economic expansion makes further progress.”
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Aside: I'm still holding PRU (mentioned here in '08), plus about a dozen more insurers.
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