Out Fox The $treet

Even after substantial gains this year, a whole slew of financial stocks still trade below book value. As written about back in January, a good portion of the insurance stocks traded close to half of book value. While the fears from the financial crisis have mostly dissipated, the stocks continue to meander below book value even with strong earnings profiles. Investors continue to fear that either the balance sheet isn more » Disclosure: Long HIG and LNC. 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. 

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. 

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.