GNW - sum of the parts is so much greater than whole
In case of GNW, they have MI, LI, LTC and Wealth management business.
Market RARELY recognizes true value to a company with multiple lines of businesses. They end up being low P/E companies for a long time.
Usually if one of the businesses is doing bad, it casts shadow on other businesses that are doing well, and brings down their value, bringing down the overall value of the company. I have seen this so many companies. The undervaluation remains low until all businesses recover, and that is possible when economy is doing really really well. Another classic example is Sony (SNE). Its pictures, entertainment is doing fantastic, but the electronics business sucks, so the company value remains very low.
Yes, the individual businesses become highly volatile and so do their stock prices, but sum of the parts will be usually greater than whole.
Selling of wealth management business is a great move, but spinning of Aussie and Canadian MI businesses will be better move, since they are so severely undervalued in GNW's overall value.