I agree completely Von, it is beyond reason, IMO unless one takes into account they had total actuarial incompetency or a business model that had zero evaluation and checks and balances quarter/quarter to year/year. One would also think GNW management would have looked at their peer's troubles and actions in comparison to their own LTC business model. All of these, hardly leads to confidence.
I also feel many institutions still believe that there will be a further LTC reserve needed in the future----regardless of all the changes, positive talks and actions to isolate. Hence the share price and near worthless valuation. They are waiting. Couple that with the debt and institutions are investing very cautiously and quickly taking profits.
JMHO but we have attracted more pure trading institutions that are able to use/borrow their % float to wield profitably in a zone both short and long.
Agree Slees and the Trust that is needed, is not there presently for management, quarterly results or LTC risk-----regardless of McInerney's words or positive outlook.
It is a "show me the money" kind of deal and if there are failures or negative surprises, expect a reaction.
Hence the institutions running this GNW ticker are just trading, short and long, options included. Either direction they are making money. When the computer sensed money flow from selling stops they will go long and vice versa for the buying money flow.
As little fish retail, we cannot change this action but all in all, do the same.
Today and the past few sessions are a prime example of hedge funds and our big banks using HFT to attack price.
GNW is an easy target, especially at these low cheap share prices and the fact that institutions are still in fear of LTC risk unknowns, quarterly results, more reserve charge, etc. Buyers are at bay.
Yes, the underlying fundamental weakness has led to this trade but this present trade is an separate entity from the fundamentals----computers with HFT are controlling the ticker.
No one knows the exact bottom but these levels are great Sp's to add or initiate, IMO.
A gift especially longer term, IMO.
Sentiment: Strong Buy
I agree that some and perhaps many institutions are "buying and holding" but we need more to do just the same and be confident in the future appreciation.
There are also institutions that are actively trading GNW, some writing naked options (that their goal is to expire worthless), some loaning out shares to other institutions for cooperative trades long and short, some day/swing trading, some using HFT computers to attack the bid/ask, some all the above. Just because they are a registered "institutional holding" does not mean they are letting the shares lie dormant ---waiting for a wish, hope, prayer and the words of McInerny. They want/need a return on their investment and just as you/I buy and sell, write covered calls or move elsewhere---they also will act.
Proof here is that GNW is trading off the grid pattern from most other insurance equities, even with a positive quarter results. It has lost about 25% since just the past 5-6 days and near 40% since post earnings. If all the institutions were just "buying and holding" we would have a far sight better stability in share price.
Sentiment: Strong Buy
JMHO Joe but a couple of factors are in play in GNW.
Fundamentals lead the trade but at times it is also like a dog chasing it's tail, kind of deal.
My two cents, fundamentally the institutions want LTC isolated and/or risk contained----especially after the billion dollar reserve charge . Until that is accomplished---with finality---they are not buying and holding in a big fashion and hence there are more shares in the float open. Meanwhile they also do not see the stock running up in Sp and hence it is a great trading vehicle---short and long, for institutions so inclined. At these levels they can buy and/or borrow many millions of shares for their trade and with some HFT control the ticker.
The other day on the June 24 when there was huge blocks of shares changing hands at or after the close---25 million---it was no accident or MM rebalance. We have lost 25% of the market cap in about 5-6 trading days ----all with no news, announcement from management, McInerney action or general sector. No point in blaming Brexit, oil, MI or anything else. Trading funds are gaining, just not common retail investors. By this type of trade performance it also keeps others from buying and encourages selling. Just like what we are seeing on this board. That action helps the short trade.
Overall, IMO it is going to take multiple quarters of good results and the isolation of the LTC division. Management is doing the best ( or what they can do) from where they inherited these books. Even an activist investor has not been interested for quite a time.
Slow rebuild---with many pitfalls and dips. Hopefully no major negative surprises.
Agree Von, management is on the correct path but it will take time. Patience is a virtue, right.
The trade shenanigans we are seeing are normal, especially at these share price levels.
The old three steps forward and two backwards.
Sentiment: Strong Buy
Have received approval for their capital plans from the Feds. Basically are common dividend increases and share buybacks programs. We wish, right.
In total, this might offer some trading strength and resiliency to their share price value and hence have a carry over effect to the financial sector in general. Especially in these low interest rate environments for people to find a decent rate of return on their investment.
One would think GNW might benefit---indirectly---from the general financial sector but it remains to be seen.
We seem to be on our own orbital pattern. Time will tell.
Sentiment: Strong Buy
JMHO but the other day this large "block institutional transfer" was for a short trade on GNW. (long shares owned, borrowed to a short)
It has been working very well for them. One could possibly expect a "cover trade"--quietly as a transfer back to the institution or division of the same.
I am sure they are in no hurry, they are running the ticker.
JMHO but management lets Sp fall or sell off to a low level and then does their share buy allotment at the cheaper level---allowing them to buy more shares.
IMO good buying opportunity.
Sentiment: Strong Buy
You got it Grey.
They are spending the money in share repurchase to help meet earnings expectations. Without the decrease in their float, would be worse.
I would be really surprised if we get a dividend increase, especially after the recent share price carnage.
We deserve one, compared with some of HIG's peers but that will get us no where.
Today is Margin Call Monday--- from Friday's hammering and they will force all who are on the wrong side of the trade to pay up the hard way. That being said, I am sure there are some trading desks that are liquidating GNW to pay for another loss.
I would not take it individually or personally between Brexit and GNW.
Fundamentally, since we are still joined at the hip to LTC there is little respect and greater trepidation---we are a higher risk play for some institutions. Regardless of McInerney's positive talk, days like today are ----risk off.
We also pay no common dividend, are buying no common shares back at these cheap prices nor is management presently buying common at these levels. No price support or stability help and as such, we become more of a pure trade vehicle, IMO.
This decline hopefully should stop when the overall market stops the carnage.
Nearing the bottom of the BB on $NYMO, while VIX is inside the top----for now.
Large blocks of shares held by one institution (bank, etc) are loaned to another institution (another bank or division of same)---- for short of long trade intent and then returned or rebalanced after that period of time.
It facilitates forceful "naked shorting" by institutions, gains some income for the shares loaned out by that institution and also facilitates options written by said institution, to expire worthless. Thy will also work in synchrony on the trade, with quiet whispers.
While the small investor waits and waits, the institution makes profitable good use of the time for multiple types of trading with very little risk, in a equity like GNW.
JMHO Grey, it is nice to see analyst's ratings improve with higher price targets but in this low interest rate environment I do not see HIG attaining these Sp levels. No complaints if they did of course but I am not holding my breath.
I would be happy for a small dividend increase the next time around.