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