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MFC, GNW, DFG, RGA, TMK, SLF, Life Insurance Stocks Overvalued

^{Published on 2011-04-12 04:51:18 - WOPRAI}
 

April 12, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Life Insurance sector and these stocks are the most undervalued as of today. MANULIFE FINANCIAL CORP (NYSE:MFC), GENWORTH FINANCIAL INC-CL A (NYSE:GNW), DELPHI FINANCIAL GROUP-CL A (NYSE:DFG), REINSURANCE GROUP OF AMERICA (NYSE:RGA), TORCHMARK CORP (NYSE:TMK), SUN LIFE FINANCIAL INC (NYSE:SLF) are all expected to go Down as they are Overvalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     MFC        MANULIFE FINANCIAL CORP             $17.48         $9.54          20.70% Overvalued           Life Insurance         
     GNW        GENWORTH FINANCIAL INC-CL A         $12.74         $11.49         20.70% Overvalued           Life Insurance         
     DFG        DELPHI FINANCIAL GROUP-CL A         $31.35         $30.55         20.70% Overvalued           Life Insurance         
     RGA        REINSURANCE GROUP OF AMERICA        $60.74         $48.95         20.70% Overvalued           Life Insurance         
     TMK        TORCHMARK CORP                      $67.08         $60.77         20.70% Overvalued           Life Insurance         
     SLF        SUN LIFE FINANCIAL INC              $31.51         $31.15         20.70% Overvalued           Life Insurance         

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

MANULIFE FINANCIAL CORP (NYSE:MFC) - Manulife Financial Corporation, through its subsidiaries, operates as a life insurance company. It provides a range of financial products and services, including individual life insurance, group life and health insurance, long-term care insurance, pension products, annuities, and mutual funds to individual and group customers in the United States, Canada, and Asia. The company also offers reinsurance services, specializing in life retrocession, and property and casualty reinsurance, as well as provides investment management services to mutual funds and institutional customers. Manulife Financial Corporation was founded in 1887 and is headquartered in Toronto, Canada.

GENWORTH FINANCIAL INC-CL A (NYSE:GNW) - Genworth Financial, Inc., a financial security company, provides insurance, wealth management, investment, and financial solutions in the United States and internationally. The company operates in three segments: Retirement and Protection, International, and U.S. Mortgage Insurance. The Retirement and Protection segment offers various protection products, including life, long-term care, Medicare supplement insurance, and senior supplemental products, as well as care co-ordination services; and wealth management and retirement income products, such as managed account programs and advisor services, financial planning services, fixed and variable deferred and immediate individual annuities, and group variable annuities. The International segment provides mortgage insurance products in Canada, Australia, Mexico, and European countries, as well as offers payment protection coverages. This segment also provides various services, analytical tools, and technology that enable lenders to manage risk. The U.S. Mortgage Insurance segment offers mortgage insurance products principally insuring prime-based, individually underwritten residential mortgage loans, known as flow mortgage insurance. Additionally, the company provides institutional products consisting of funding agreements, funding agreements backing notes, and guaranteed investment contracts; and corporate-owned life insurance products. It primarily serves individual investors, institutional customers, financial institutions, mortgage originators, banks, building societies, credit unions, and non bank mortgage originators. Genworth Financial distributes its products and services through financial intermediaries, advisors, independent distributors, affinity groups, and sales specialists. The company was founded in 2003 and is headquartered in Richmond, Virginia.

DELPHI FINANCIAL GROUP-CL A (NYSE:DFG) - Delphi Financial Group, Inc., together with its subsidiaries, provides integrated employee benefit services. The company operates in two segments, Group Employee Benefit Products and Asset Accumulation Products. The Group Employee Benefit Products segment provides group life, disability, and excess workers compensation insurance products to small and mid-sized employers. It also offers travel accident, voluntary accidental death and dismemberment, and group dental and limited benefit health insurance products, as well as assumed workers compensation and casualty reinsurance. This segment markets its group products to employer-employee groups and associations in various industries primarily through independent brokers and agents. The Asset Accumulation Products segment offers fixed annuities, such as single premium deferred annuities, flexible premium annuities, and multi-year interest guarantee products. It offers its products and services in the United States and Canada to individuals through networks of independent insurance agents. Delphi Financial Group also provides integrated disability and absence management services, including event reporting, leave of absence management, claims and case management, and return to work management. The company was founded in 1987 and is based in Wilmington, Delaware.

REINSURANCE GROUP OF AMERICA (NYSE:RGA) - Reinsurance Group of America, Incorporated, an insurance holding company, engages in individual and group life, annuity, asset-intensive, critical illness, and financial reinsurance in the United States, Canada, Europe, South Africa, and the Asia Pacific. It provides reinsurance for a portfolio of life insurance products, including term life, credit life, universal life, whole life, group life, joint and last survivor insurance, and critical illness, as well as annuities and financial reinsurance. The companys asset-intensive reinsurance products primarily include reinsurance of corporate-owned life insurance and annuities. It also offers reinsurance for mortality, morbidity, lapse risks, and investment-related risks. The company was founded in 1973 and is headquartered in Chesterfield, Missouri.

TORCHMARK CORP (NYSE:TMK) - Torchmark Corporation, through its subsidiaries, provides individual life and supplemental health insurance products, and annuities to middle income households. It offers various life insurance products, including traditional and interest sensitive whole-life insurance, term life insurance, and other life insurance. The company also provides various health insurance products, including juvenile and senior life coverage; medicare supplement; supplemental limited-benefit health insurance products that include hospital/surgical plans, cancer, and accident plans sold to individuals under age 65; and medicare supplement and medicare part D prescription drug insurance. In addition, it offers a range of annuity products comprising single-premium deferred annuities and flexible-premium deferred annuities. Torchmark Corporation sells its products through direct response, exclusive agents, and independent agents in the United States, Canada, and New Zealand. The company was founded in 1900 and is based in McKinney, Texas.

SUN LIFE FINANCIAL INC (NYSE:SLF) - Sun Life Financial Inc., together with its subsidiaries, provides various life and health insurance, savings, investment management, retirement, and pension products and services to individuals and corporate customers. Its product portfolio includes individual life insurance, individual annuity and saving products, group life and health insurance, group pension and retirement products, mutual funds, asset management services, individual health insurance, and reinsurance-life retrocession. The company distributes its products through direct sales agents; independent and managing general agents; financial intermediaries, such as brokers; banks; pension and benefit consultants; and direct sales, including Internet and telemarketing. Sun Life Financial Inc. operates primarily in Canada, the United States, the United Kingdom, and Asia. It has a joint venture agreement with CIMB Group Sdn Bhd. The company was founded in 1999 and is based in Toronto, Canada.

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