Yes, I think the shorts were asking for it. NWLI got down to $125 where it was selling at 5 times earnings and about one-third of book value. They must have thought NWLI was going bankrupt. I owned a lot of NWLI and I bought more at $158.50 the day before earnings and more still the day after earnings. I wanted to help teach the bears a lesson. I think that some of the bears got the message today but there are still more to convert.
That's a surprisingly high short interest. When I check the other lifeco's, they don't seem to have the same levels. Plus, you know it is real shorts, not hedging against options as NWLI doesn't trade options.
Not sure why people would be so aggressive against such a well-capitalized, profitable lifeco. Perhaps because the dividend is so low, it is a cheap way to bet against the overall life insurance industry, but still, anyone who did any due diligence would see this is not another HIG.
I was buying with strong conviction after the latest Q report. Nice that there are some of these stocks where the market is slow to respond. Everything to like here, very strong earnings growth, very cheap valuation (relative to book and earnings) and a market that has been responding for 12 months although it is still way behind the real value. NWLI is now the second largest holding in accounts managed for Freedom Mountain Investment clients.
Edward J. Roche
President, Freedom Mountain Investments