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UAM, MAR, HOT, HTHT, RLH, MHGC, Life Insurance Stocks Overvalued

^{Published on 2011-04-12 04:51:32 - 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. UNIVERSAL AMERICAN CORP (NYSE:UAM), MARRIOTT INTERNATIONAL-CL A (NYSE:MAR), STARWOOD HOTELS & RESORTS (NYSE:HOT), CHINA LODGING GROUP-SPON ADS (NASDAQ:HTHT), RED LION HOTELS CORP (NYSE:RLH), MORGANS HOTEL GROUP CO (NASDAQ:MHGC) 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               
     UAM        UNIVERSAL AMERICAN CORP             $22.76         $13.66         20.70% Overvalued           Life Insurance         
     MAR        MARRIOTT INTERNATIONAL-CL A         $34.18         $33.48         20.70% Overvalued           Hotels - Motels        
     HOT        STARWOOD HOTELS & RESORTS           $56.42         $54.81         20.70% Overvalued           Hotels - Motels        
     HTHT       CHINA LODGING GROUP-SPON ADS        $20.70         $20.16         20.70% Overvalued           Hotels - Motels        
     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        

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.

UNIVERSAL AMERICAN CORP (NYSE:UAM) - Universal American Corp., together with its subsidiaries, provides health insurance and managed care products and services primarily to the senior population in the United States. It operates in four segments: Senior Managed CareMedicare Advantage, Medicare Part D, Traditional Insurance, and Senior Administrative Services. The Senior Managed CareMedicare Advantage segment offers private fee-for-service plans; coordinated care plans; and preferred provider organization plans, which provide healthcare benefits and Medicare covered benefits, as well as additional supplemental benefits, including a defined prescription drug benefit. The Medicare Part D segment offers prescription drug coverage as a benefit to Medicare-eligible beneficiaries, known as Part D benefits under contracts with the Center for Medicare and Medicaid Services. The Traditional Insurance segment offers Medicare supplement business; specialty health insurance products, primarily fixed benefit accident and sickness disability insurance to the middle income self-employed market; and senior life insurance products. The Senior Administrative Services segment provides outsourcing services to affiliated insurance companies, as well as unaffiliated companies that support insurance and non-insurance products, primarily for the senior market. Universal American Corp. distributes its products through an independent general agency system and a career agency system. The company was founded in 1981 and is headquartered in Rye Brook, New York.

MARRIOTT INTERNATIONAL-CL A (NYSE:MAR) - Marriott International, Inc. operates and franchises hotels and related lodging facilities worldwide. It operates and franchises hotels and resorts under various brands, including Marriott, JW Marriott, Renaissance, Autograph Collection, Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn, TownePlace Suites, Marriott ExecuStay, Marriott Executive Apartments, The Ritz-Carlton, Bulgari, and EDITION. The company also develops, operates, markets, and sells timeshare interval, fractional ownership, and residential properties under the brand names of Marriott Vacation Club, The Ritz-Carlton Destination Club, The Ritz-Carlton Residences, and Grand Residences by Marriott. In addition, the company operates Marriott ExecuStay, which provides furnished corporate apartments; and Marriott Executive Apartments that offers temporary housing for business executives, as well as operates Marriott conference centers. As of December 31, 2010, it operated or franchised 3,545 lodging properties with 618,104 rooms, including 3,737 units of home and condominium products, as well as provided 2,043 furnished corporate housing rental units. The company was founded in 1971 and is headquartered in Bethesda, Maryland.

STARWOOD HOTELS & RESORTS (NYSE:HOT) - Starwood Hotels & Resorts Worldwide, Inc., together with its subsidiaries, operates as a hotel and leisure company worldwide. It primarily operates luxury and upscale full service hotels, resorts, retreats, and residences. The company also engages in the development, ownership, and operation of vacation ownership resorts; marketing and sale of vacation ownership interests in the resorts; and provision of financing to customers who purchase such interests. In addition, it develops, markets, and sells residential units at mixed use hotel projects. The company operates hotels and resorts under the brand names of St. Regis, The Luxury Collection, W, Westin, Le Meridien, Sheraton, Four Points, Aloft, and Element. As of December 31, 2010, its hotel portfolio included 1,027 owned, leased, managed, and franchised hotels with approximately 302,000 rooms, as well as owned 23 vacation ownership resorts and residential properties in the United States, Mexico, and the Bahamas. The company was founded in 1969 and is based in White Plains, New York.

CHINA LODGING GROUP-SPON ADS (NASDAQ:HTHT) - China Lodging Group, Limited, through its subsidiaries, owns and operates a chain of hotels in the Peoples Republic of China. It operates HanTing Express Hotel that targets knowledge workers and value-conscious travelers; HanTing Seasons Hotel, which targets mid-level corporate managers and owners of small and medium enterprises; and HanTing Hi Inn that serves budget-constrained travelers. As of December 31, 2009, the company had 173 leased-and-operated hotels, and 63 franchised-and-managed hotels. It also had 21 leased-and-operated hotels, and 123 franchised-and-managed hotels under development. China Lodging Group, Limited was incorporated in 2007 and is headquartered in Shanghai, the Peoples Republic of China.

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.

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