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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Area51 who wrote (46431)	2/6/2012 10:03:24 AM
From: Brasco One	Respond to of 78566

im still owner of pnx and want it over 5.

To: Area51 who wrote (46431)	2/6/2012 11:26:30 PM
From: Brasco One	Respond to of 78566

CX bonds now trading at $93+.

To: Area51 who wrote (46431)	2/8/2012 1:37:34 PM
From: Brasco One	Respond to of 78566

PNX Earnings Today: Still Positive on Valuation, Despite Issues ?? Positive on valuation, supported by stat BV analysis and takeout potential We reiterate our Buy rating. a) Our ROE-adjusted P/B derived $4.50 price target is compelling, even with PNX’s various issues. b) Our statutory BV analysis suggests ~$5 of value, even after adjusting for a pension funding shortfall. c) Given its small scale, weak insurance ratings, and poor new sales prospects, we continue to view PNX as a potential take-out candidate. ?? Disappointing performance, though recent steps help a) PNX’s share price has fallen (88)% since its demutualization/IPO in June 2001, vs. 2% appreciation for our life group—with underperformance worsening in the last 5 years. b) Mgmt has taken some positive actions (e.g., cost cuts, freeing-up capital, and growing fixed annuity sales), but we think the value of PNX’s in-force blocks would be better-preserved in the hands of a larger, higher-rated insurer. ?? Relatively high operating expenses and executive/director comp a) Despite cost cutting over the years, we see the potential for further action as PNX’s statutory operating expense per in-force policy is ~3.5x the avg level at small-cap peer insurers. b) Although mgmt comp policies have been revised recently, they still appear high in light of PNX’s small market cap and sluggish performance. Executive and director comp in 2010 was $11M—5.2% of PNX’s $0.2B market cap, above average levels at similarly-sized life insurers. ?? Valuation: Buy—Lowering price target to $4.50; Adjusting estimates a) Our PT is based on ROE-adjusted P/B (ex-aoci) and represents ~0.45x 3Q12E BVPS (ex-aoci). b) Also revising EPS to reflect 3Q11 results and commentary.