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SLF, RLH, MHGC, SVN, WYN, HMIN, Life Insurance Stocks Overvalued

^{Published on 2011-04-12 04:41:43 - 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. SUN LIFE FINANCIAL INC (NYSE:SLF), RED LION HOTELS CORP (NYSE:RLH), MORGANS HOTEL GROUP CO (NASDAQ:MHGC), 7 DAYS GROUP HOLDINGS LT-ADR (NYSE:SVN), WYNDHAM WORLDWIDE CORP (NYSE:WYN), HOME INNS & HOTELS MANAG-ADR (NASDAQ:HMIN) 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               
     SLF        SUN LIFE FINANCIAL INC              $31.51         $31.15         20.70% Overvalued           Life Insurance         
     RLH        RED LION HOTELS CORP                $8.14          $7.99          20.70% Overvalued           Hotels - Motels        
     MHGC       MORGANS HOTEL GROUP CO              $8.80          $2.20          20.70% Overvalued           Hotels - Motels        
     SVN        7 DAYS GROUP HOLDINGS LT-ADR        $22.50         $19.35         20.70% Overvalued           Hotels - Motels        
     WYN        WYNDHAM WORLDWIDE CORP              $31.35         $24.48         20.70% Overvalued           Hotels - Motels        
     HMIN       HOME INNS & HOTELS MANAG-ADR        $42.22         $40.96         20.70% Overvalued           Hotels - Motels        

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.

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.

RED LION HOTELS CORP (NYSE:RLH) - Red Lion Hotels Corporation, a hospitality and leisure company, engages in the ownership, operation and franchising of midscale, full, select, and limited service hotels under the Red Lion brand. As of December 31, 2009, Red Lion system of hotels contained 45 hotels, of which 19 were wholly-owned, 13 were leased, and 13 were franchised located in 8 states and 1 Canadian province. It also offers entertainment services, such as event ticketing, and the promotion and presentation of various entertainment productions. In addition, the company provides ticketing inventory management systems, call center services, and outlet/electronic channel distribution for event locations. Further, it has a direct ownership interest in a retail mall, as well as involves in real estate investments. The company was formerly known as WestCoast Hospitality Corporation and changed its name to Red Lion Hotels Corporation in September 2005. Red Lion Hotels Corporation was founded in 1937 and is based in Spokane, Washington.

MORGANS HOTEL GROUP CO (NASDAQ:MHGC) - Morgans Hotel Group Co., a hospitality company, engages in the ownership, operation, acquisition, development, and redevelopment of boutique hotels in gateway cities and resort markets primarily in the United States and Europe. The company owns and manages Morgans, Royalton, and Hudson hotels in New York, New York; Delano South Beach, Mondrian South Beach, and Shore Club hotels in Miami, Florida; Mondrian Los Angeles hotel in Los Angeles, California; Clift hotel in San Francisco, California; Mondrian Scottsdale hotel in Scottsdale, Arizona; St. Martins Lane and Sanderson hotels in London, the United Kingdom; Hard Rock hotel and casino in Las Vegas, Nevada; and Ames hotel in Boston, Massachusetts. As of December 31, 2009, it owned, or partially owned, and managed a portfolio of 13 luxury hotel properties comprising approximately 4,700 rooms. The company was incorporated in 2005 and is headquartered in New York, New York.

7 DAYS GROUP HOLDINGS LT-ADR (NYSE:SVN) - 7 Days Group Holdings Limited and its subsidiaries operate limited service economy hotels under the brand name of 7 Days Inn in the Peoples Republic of China. The company provides accommodations and services primarily to business and leisure travelers. As of June 30, 2010, it operated 399 hotels consisting of 257 leased-and-operated hotels and 142 managed hotels representing a total of 39,561 rooms covering 62 cities. The company was founded in 2004 and is headquartered in Guangzhou, the Peoples Republic of China.

WYNDHAM WORLDWIDE CORP (NYSE:WYN) - Wyndham Worldwide Corporation, together with its subsidiaries, provides various hospitality products and services to individual consumers and business customers in the United States and internationally. It offers its products and services under the Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Howard Johnson, Wyndham Rewards, Wingate by Wyndham, Microtel, RCI, The Registry Collection, ResortQuest, Landal GreenParks, Novasol, Hoseasons, cottages4you, James Villa Holidays, Wyndham Vacation Resorts, and WorldMark by Wyndham brand names. The companys Lodging segment franchises hotels in the upscale, midscale, economy, and extended stay markets of the lodging industry, as well as provides hotel management services for full-service hotels. Its Vacation Exchange and Rentals segment provides vacation exchange products and services, as well as access to distribution systems and networks to resort developers and owners of intervals of vacation ownership interests (VOIs); and markets vacation rental properties primarily on behalf of independent owners, vacation ownership developers, and other hospitality providers. Wyndham Worldwide Corporations Vacation Ownership segment develops and markets VOIs to individual consumers; and provides consumer financing in connection with the sale of VOIs, as well as offers property management services at resorts. The company is headquartered in Parsippany, New Jersey.

HOME INNS & HOTELS MANAG-ADR (NASDAQ:HMIN) - Home Inns & Hotels Management Inc. engages in the development, lease, operation, franchise, and management of a chain of economy hotels in the Peoples Republic of China. The company operates its hotels under the Home Inn brand name. As of June 30, 2010, it operated 674 hotels in 126 cities in China, of which 390 were leased-and-operated hotels, and 284 were franchised-and-managed hotels. The company was incorporated in 2001 and is headquartered in Shanghai, the Peoples Republic of China.

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