Wrong . . . book value means nothing if you don't have the underlying operating performance to be a going entity. Look at these shopping center REITS, like General Growth Properties, who don't have the ability to meet their debt obligations. They have incredibly high book values, but the stock is trading for less than 10% on the dollar . . . why? Because, of bankruptcy fears.
Thankfully, we don't have to worry about that with CNO. CNO had a great week and I'm sure that we will see many more of them soon.
1. 1.35 Operating Income in 2009. 2. Trading at a 1.48 PE. 3. Historical PE is 8 . . . which would put the stock at $10.80 sometime in 2009. 4. Business model is unique - nobody targets middle income seniors. 5. Expenses have been rung out of the system . . . costs have come way down due to customer service consolidation. 6. Spinoff of trust relieves CNO of the burden of carrying a capital-sucking LTC business and allows those $ to be redeployed. 7. Stock market and ratings won't hurt CNO compared to big guys (like HIG or MET) . . . target market and policies don't need high ratings to be sold. 8. Multiple distribution platforms (Colonial Penn, Bankers Life, Conseco) that allow people to buy how they want to buy. 9. Large Insider Buys in September between $4-7 . . . I think they know something . . . and I expect that they will continue to buy it down here. 10. $2.09 gives you an opportunity to "BACK UP THE TRUCK" and accumulate a real wealth-changing position . . . 15,000 shares and counting . . .
I think you accurately nailed the reasons most of us are long the stock.
The only thing I could add to the list is this:
(11) CNO is one of the very few financial company's that stayed entirely clear of the exotic financial instruments that have clobbered most of the other companys in the sector. No CNO exposure to the CDO and CDS and other crap that just about everyone was stupid enough to buy into. I think the past bk that CNO went through may have benifited them in this one respect, because it caused them to be sure they kept their nose clean when everyone else was getting involved with this junk. GOOD JOB CNO.