have not filed a class action against UNM? If so, maybe they too could join in the fun. This is unbelievable. They are all going to look pretty bad when this stock recovers. That won't be too far off, and some people will have wasted some very valuable time of their lives.
Anyhow, if there is a big write-off as expected, it will be the last; and you can expect a stead climb from there. They won't be fooled twice. It looks like it might be time soon to buy more.
Nobody, you just keep beating that same old, tired drum, predicting a great recovery, telling investors to have faith, telling everyone how easy it is to rebuild what Chandler has wrecked.
How about answering a couple of questions, and please be specific.
1. After all the write-off dust settles, exactly how is this company going to recover to where it was before the crash, and how long do you predict it will take?
2. The company must improve sales everyone would agree. When Chandler has failed to consistently to do that in the past with Provident or Revere, what is he going to do differently now to ensure sales growth?
No BS, Nobody. No happy talk. I have asked you these questions before, and your answers have been long on hipe and short on substance. Tell us why we should invest another dime in this company with everything we now know and with all the ticking time bombs that may or may not be defused over the next several months.
The Sales growth is very easy to accomplish. All they have to do is answer the door when brokers ask for a price reduction at the prospect stage. The challenge is the right balance of profitable growth and sales.
Selling will never be UNUM's problem. To balance sales with Profit is the key Chandler and many other execs at UNUM will figure out. There is no magic solution and it is a new puzzle every quarter, as soon as you put it together it falls apart with new puzzles like higher than expected incidence spread over 7 million insured lives with no opportunity to increase rates due to a rate guarantee of two years or more.
From here on out there will be nothing but windfall profits but UNUM must watch the number of good customers that do leave when faced with a price increase, when they can receive "good enough" service for their premium dollar.
I expect that UNM will have a realized anualized net income of 500 million by third or fourth quarter next year. By saying that I don't expect the year 2000 financials to produce that. But the stage will be set for it. 2001 should produce in excess of that.
Why? Because the combined NI of both companies would have produced that by that time assuming their past trends were going to continue. Together with the cuts by Chandler it should be a slam dunk. OK, he has had to write off more than we expected. But that is life. With the write offs, UNM should be well positioned to hit that level. In this business, I value that level of cash flow at 12-17 billion. I used at 3-4% perpetuity to arive at that number which assumes no growth. UNM is currently at 6.8. So, by my estimations the stock should double by third or fourth quarter next year. -- Not what I wanted to wait for, but I do have time.
Now, for the long-term, internal growth will be a factor. But for the short-term, combining the companies by aligning the product offerings, consolidating the client services and claims payment and management systems, consolidating the financial reporting systems, and giving UNM the appearance of a cohesive organization is paramount. That is what Chandler is doing even as we speak.
How Chandler will address the need to create a real sales organization is anybody's guess. I've never seen him do that. But as I've stated before, as long as he can continue merging, that won't be a big issue. The smoke will hide that short coming, and maybe he will pull a rabit out of the hat and show he really can do it.
I agree with you that it needs to be there. We simply disagree in the timeframe needed.
Do you really think this stock can go any lower? I do not have any substance to provide to you, but this will be a good company. With the stock so low right now, it really has no place to go but up. How far and how fast? Who knows.
That is the only reason I can give you to invest in this company RIGHT NOW!!!!