Genworth Finl Inc (NYSE:GNW)

ht Fusion IQ

Flyer. I hate insurance (I have a few Fool friends in the field who tweak me whenever I say this -- hello, Hodges) -- and I find the businesses pretty opaque and not easily followed. So I CAP them and see if my hunches work out. Outperform.

Mortgage ins business doing great, but stock trades like it has no value..

Undervalued and under the radar.

So here we have an undervalued life insurer wrapped together with an undervalued mortgage insurer. Sounds like $ to me.

As everyone knows, Genworth shares have been heavily punished due to the losses from the MI business. I would say shareholders are giving the MI division a negative value currently because of prior reserve increases to cover rather enormous losses. When their MI business achieves profitability again (which should be within a few quarters), you will see this stock move very quickly towards book value. The thing I cannot understand is why their competitor Radian (RDN) is trading at $11 a share with earnings losses, or 2X book value, while this continues to languish at $10 per share, or 0.3 book value. GNW has a more stable business than RDN, and genuine earnings from their insurance businesses. My view is the new leadership will be laser focused on returning the businesses to profitability, and then moving to the next phase of their business transition plan (permanently breaking the MI company apart from the insurance companies). I would look to sell any real shares at around tangible book value, which was just under $24 a share last I looked.

“The less I know about other people’s affairs, the happier I am. I’m not interested in caring about people. I once worked with a guy for three years and never learned his name. Best friend I ever had. We still never talk sometimes.”

Housing recovery will help mortgage market.

New CEO is big improvement.

Trading at less than 1/3 book value, and showing a breakout on the charts. Fundamentals and technicals both say GO here.

Valuation.

Its terribly undervalued - its selling for slightly over 25% of book

Solid company, way undervalued at the current P/E multiple.

$34M in net income a vast improvement over the yr ago loss of $16M still indicates a downward trend from this yr's Q1 income of $47 M and huge let down from its Q2 of $ 76M Mortgage insurance division still suffering from mortgage meltdown

T$x A S144<=33

Based on Graham number valuation

Value

On 8-18-12 Megashort picked GNW

I would like to have this stock put on my "watch list"

thanks