Out Fox The $treet

Hartford is too cheap to accept a buyout with a limited premium. The consistent earnings profile and huge capital return plan position shareholders for solid returns going forward. The recommendation remains to own Hartford based on value. With an intra-day spike to near $51 on high volumes, The Hartford (NYSE: HIG ) is under accumulation based on rumors of a buyout offer. Back when Chubb Corporation (NYSE: CB ) accepted a buyout offer, Hartford was listed as a prime buyout target in the P&C space so this shouldn't be a big surprise. Read the full article on Seeking Alpha. Disclosure: Long HIG. Please read the disclaimer page for more details. 

Summary AIG registered with the SEC to unload its 46.0% position in AerCap. AIG will obtain proceeds of roughly $4.3 billion at current prices. The history of large buybacks and a stock trading below book value make AIG an intriguing pick with a catalyst for 2015. The promising prospects for a larger stock buyback pique our interests in American International Group (NYSE: AIG ) . The insurance company already has a solid buyback program, but the disposal of a large investment could provide the funds needed to accelerate the buyback plan at a time that the stock still trades below book value. Read the full article at Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Summary The Hartford reported Q4 earnings that beat analyst estimates, yet the market was unimpressed with the 2015 growth forecast. The insurance company has a large stock buyback program that is increasing value considering the stock trades at or below book value. Investors shouldn't attempt to over analyze the stock and instead use the high yields to guide the way.          As with any large insurance company approaching $19 billion in annual revenue, lots of analysis can go into the quarterly earnings of The Hartford (NYSE: HIG ) . The company offers property and casualty insurance for both commercial and personal lines along with group benefits and investments via mutual funds. Read the full article at Seeking Alpha.  Disclosure: Long HIG. Please review the disclaimer page for more details.   

After the financial crisis, numerous financial-related stocks traded at prices below book values due to the fears in the accuracy of the reported balance sheets. In the years since the crisis, most of those fears have disappeared, yet many financial stocks haven’t regained the valuations suggested by the improving asset bases. A prime example exists in the insurance and retirement services sector where both Hartford Financial Services Group (NYSE: HIG   more » ) Disclosure: Long HIG and LNC. Please review the disclaimer page for more details. 

If the news from the WSJ late Sunday night is accurate, Aetna (AET) offers an extremely cheap stock. The company is rumored to have finalized a deal to acquire Coventry Health Care (CVH) in a $5.7B deal. Both companies are leading national managed health care companies. Coventry has a larger focus on government-based health plans that apparently attracted the interests of Aetna. Considering Aetna has only a $12.7B market cap, this is a sizable deal for the company to undertake, though the company could quickly show how beneficial a mostly cash deal can be in this ultra low interest rate environment. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Ok, Barclays Capital didn't downgrade Lincoln National (LNC) for being too cheap. One has to wonder if the stock trading around .4x book value actually played a roll. Or maybe these analysts just use recent history as a basis for price targets. Honestly don't understand how a price target below book value could ever be justified. The company has made at least a $1 in each of the last 4 quarters and trades at 4.7x forward estimates. In what book is that a stock to sell? Even worst is the Daily Political website throwing in the P/E ratio of 30 to make the analyst call appear smart. Not sure why that website is even commenting on stocks, but it had the most detail that I could find on the downgrade. While the stock is down 3% today, the bounce off the 10ema will be bullish if it holds. Also, the stock came close to closing the gap from Friday just below $21. Anybody buying at these levels at least has limited risk if it goes ahead to fill the gap today or sometime this week...

Most financial stocks haven't recovered from the financial crisis even though the business has returned to solid profits. The growth doesn't exist like it did prior to the crisis but income shouldn't be ignored. The insurance sector remains one of the most undervalued sectors in the market. Stocks like Hartford Financial (HIG), Lincoln National (LNC), MetLife (MET) , and Prudential Financial (PRU) trade significantly below book value. The group consistently traded at over 1.5x book value prior to the crisis. Though all of these companies have variant business lines, the stocks have traded in an incredibly consistent pattern. Some such as Prudential have already significantly exceeded the book value per share from before the crisis yet the stock trades at a paltry 0.59 of book value. Read the full article at Seeking Alpha. Disclosure: Long HIG and LNC. Please review the disclaimer page for more details. 

After the close last night, Paulson & Co filed a 13D disclosing a presentation to the BOD and a letter sent to the CEO. The goal being for Hartford Financial (HIG) to begin the process of a spin-off of it's Property & Casualty business. Simply Paulson believes that Hartford has an industry low valuation due to the combination of both the P&C and Life business lines that competitors all spun-off long ago. He makes a compelling pitch that the ultra low valuation for the company is based on the thesis that analysts just don't follow or understand it due to the combined business lines. A Travelers (TRV) that focuses on P&C or a Lincoln Financial (LNC) that focuses on Life have higher multiples since the analysts follow either business line, but not both. Without doing all that research I could've told them that Hartford was incredibly cheap trading at close to 40% of book value. Paulson though has an army of analysts that did some incredible research. Ho...