Player Avatar jed71 (88.57) Submitted: 3/12/2010 4:18:09 PM : Outperform Start Price: $8.42 FFG Score: +275.70

Here's another insurer that took a woodshed beating early last year. Price to Book still relatively low at .8. Price to sales .62 and price to cash flow around 5. These figures indicate this is still somewhat oversold. Losses have been mitigated and operating income / net income is back in the black. Cash flow looks decent and debt to equity has improved dramatically over the past several quarters. All in all, a solid company that has proven it has made it through last year's mess and is preparing to start regorwing earnings and ROE. Same with GNW, it all depends on whether or not they can keep selling annuities and insurance products that produce a good rate of return. I know the annuities market has not returned to its former 2006-7 glory, but not sure it ever will. Annuity sales have stabilized a bunch since early 2009 and that, in my opinion, is a very good sign. Life insurance products have been going through a redesign of late with many insurers moving away from the lower yielding Term to either Whole, UL, or a blended Term / UL, which should help to improve FFG's margins.

My expectation is that FFG, GNW, MET and several other insurers will continue higher on a long, and slow crawl. Those who have patience with these names should be rewarded. Although I think watching some of these tickers might be a little like watching the grass grow. Long term price target currently ~$34 a share.

Member Avatar jed71 (88.57) Submitted: 3/15/2010 9:31:28 AM
Recs: 0

Oops, didn't mean to put MET, that was a typo. I meant to say ING.

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