Out Fox The $treet

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. 

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...

This is the 4th in a series of articles on stock sectors that have struggled to recover from the levels prior to the financial crisis. (See the first three here:  1 ,  2 ,  3 ) This article focuses on the life insurance and retirement financial services sector. As in most sectors, these companies don't have the exact same business models making broad comparisons an initial step of research. Read the full article at Seeking Alpha . Disclosure: Long CB, HIG, LNC in client and personal accounts. Please review the disclaimer page. 

Hartford Financial (HIG) reported earnings that beat estimates last week yet the stock still trades considerably below its book value around $46. Analysts even expect earnings for 2011 and 2012 in the $4 range giving them a sub 8 PE. So why does the stock still trade in the $20s and not the $50s? Beats me. Listen to the CEO, Liam McGee on the Kudlow Report on CNBC on Friday. The guy sounds very positive about the future and it clearly appears that the commercial real estate risk is behind them. Stock portfolio issues are part of the past and just about everybody dreamed up issue is overblown. Take a listen and decide for yourself. Disclosure: Long HIG in personal accounts including Covestor accounts. 

Leading insurance provider Hartford Financial (HIG) reported an 11% sequential increase in Book Value to $45.80 on a $.46 earnings beat of $1.43. Yes, that is correct a company that continues to report solid earnings quarter after quarter now trades at 50% of Book Value. Thats difficult to grasp. Companies shouldn't trade below book value if they are very profitable. Usually they trade at multiples of BV commensurate with profits and growth. Analysts expect HIG to make $3.6+ next year after all. HIG repaid TARP earlier this year. Very difficult to tell what is holding back investors. Heck even mega financial investor John Paulson invested back in August and that hasn't gotten the stock going. What is it going to take? No reason to sweat that as an opportunistic investor willing to wait out the market. HIG provides one of the better values in the market. Via Bloomberg : Chief Executive Officer  Liam McGee , hired in October 2009, returned Hartford to profit last year a...

At least that's the reasoning for an upgrade by Barclays of Hartford Financial (HIG) to a price target of $32. The stock current trades in the $23s and has a book value over $40 so that's not a huge stretch. Actually anything in the low $30s seems absurdly cheap. Interesting news though to see that big agents that sell life insurance policies are restarting business with HIG. Not sure what took so long as HIG has been financially solid for a while now. Info from Barclays: Investment Conclusion We are upgrading The Hartford to a 1-Overweight from a 2-Equal Weight and are increasing our price target by a dollar, to $32 from $31. There are two reasons for the upgrade. First, a survey of top-producing life insurance salespeople around the U.S. conducted in recent weeks by Barclays Capital Life Insurance Research -- a survey of agents who would be best positioned to write big policies for The Hartford -- found renewed interest by these agents in doing business with The Hartfor...