Might be also because ANAT has a large P&C business - about 2/3 of premiums. Pretty much all the P&C companies have done better than the life companies and trade at higher valuations. They are seen as being lower risk as most of the insurance they sell is shorter term, so they can adjust their rates faster to reflect new claims conditions, but also the new low rate investment environment.
I think lifeco's are in the sweet spot now though with better valuations plus interest rates starting to move upwards.
Ross never seems to hold the shares. Not sure why, but my guess is that he'd rather have the cash to support his lifestyle and he knows he's getting daddy's majority share in the next few years.
I wouldn't read too much into it personally.
Robert Moody is the father and CEO who holds most of the shares in NWLI.
Ross Moody is the son and a pretty regular seller of shares. I think perhaps he does like living large and needs the cash to maintain his lifestyle.
Those options being purchased at $150.00 and then sold expired in early 2014, so I suspect they wanted to cash them in, but could not afford to take the shares and hold them.
Insiders generally don't do a lot of anything in this stock, and the next set of options does not expire until 2017.
I agree it is more difficult going overseas to understand financial reports, but I think it is worth making the effort these days. The European and emerging markets are much cheaper than the US, so should have better opportunities. The advantage to Europe is that the economies support rule of law and accounting uses IFRS, which is the global standard and similar to GAAP.
NWLI is still my largest position and should do very well over the next few years. It is probably one of the safest, most undervalued stocks around The big advantage of AEG is that it is somewhat cheaper than NWLI, but also has more shareholder friendly management. The big downside with NWLI is the lack of concern of management for shareholders. It is probably more risky, or I should say, was more risky in the past. Hopefully it is not now. But I also think there is a good chance investors will move it up faster due to it's dividend, etc.
So, not trying to hijack the board here, but sold 20% of my NWLI (it had just gotten too big) and moved it into AEGON - AEG.
There are a few cheaper US lifeco's than NWLI like PNX, but PNX has many issues so would stay away.
AEG on the other hand, trades at 40% of book as opposed to NWLI's 56%
AEG has a forward P/E of 8.8, NWLI's trailing is 8.9 (NWLI has no forward P/E)
AEG has a higher dividend yield of 3.6%
AEG's ROE and ROA are less than NWLI's, but that is not a bad thing as it provides scope for improvement which will drive higher earnings and share price. Management is focused on this and, while they recently announced a scale-back in goals, they have a plan to get there
AEG is one of the world's largest insurers. They are based in the Netherlands, but 70% of their business is in the U.S. through their TransAmerica subsidiary. So their success is based largely on the U.S. They did take some money from the Dutch government back in the financial crisis, but paid it back without using it. They are highly rated by all the rating agencies, so no real concerns about claims-paying abilities.
It is fairer to compare them to a larger insurer like a MFC or even a MET than NWLI due to their size and it does trade at a much cheaper P/B and P/S, again showing the potential upside if than can get their profitability back up to industry levels.
The other ironic thought I am having is that buying NWLI in Texas gives global/emerging markets exposure, so buying a European insurer is a good way to get U.S. exposure - perhaps that is another of the reasons they are both trading at low valuations.
No reason it can't go much higher Lots of valuation support, improving interest rate environment, better perception of lifeco's in the market. MET and PRU identified in Barron's this week as being some of the cheapest stocks.
Withe recent rise in rates, LQD (the investment grade ETF) is now the cheapest since the end of 2011, so higher yielding than any point of 2012. The current yield is 3.83% and is the best proxy for NWLI's investing in my experience.
According to NWLI's last quarterly, their expected yield for their portfolio going forward is 4.60%, so being able to reinvest at 3.83% going forward is not as big a hurdle as we saw last year where they were still able to generate good earnings.
Well, we finally hit $200 today and that was sure a long time coming. It's also a new high since the financial crisis low in 2009, but no reason we can't go a lot higher. The life insurers seem to be finally attracting investor attention and the profitability of NWLI through this whole period is better than most and it is at one of the cheapest valuations.
Sorry pmlljl, I was just kidding. It just seemed ironic that the day that you posted about squeezing the shorts was the day we had our best more in probably a month.
You have 2 issues here:
1. You can't really compare a P&C company with a life company in the current environment. Life companies are perceived as much more risky due to the longer duration of their obligations and the reinvestment risk on existing policies. Because P&C pricing can be adjusted much more quickly. Look at even major life companies like MET which are also trading a very low valuation metrics
2. ANAT pays a yield and NWLI (almost) does not. In the current environment where so many people are looking for yield, ANAT will be much more attractive. In the market in general, if you compare 2 equivalent companies valuation wise, 1 with yield, 1 without, the one with yield is getting a much better valuation.
If you believe that interest rates normalize over time, life companies are much better opportunities. On the other hand, if you think the US is turning into Japan, probably the P&C companies do better over the next few years.
The other thing is She’s only acting commissioner, nominated to be commissioner, and she is not popular w/ the Democrats and some Republicans, unlikely to be confirmed.
Looks like it cut off the bottom of the article. Perhaps it is because you are posting large posts you are getting these problems?
Thanks for the link Ben. it is hard to believe that a Texas Insurance Commissioner would out a local company out of business because of an argument with the Brazil government, especially when the Moody's have so much business in Texas and there are no political points to be scored. Still, even though I am pretty sure NWLI is okay here, I've certainly seen it go the other way - for example, an indemnification clause protecting the seller of an asset in contract getting turned over by the courts. Hopefully, she just moves onto something else fairly quickly.
White Mountain Insurance (WTM) popped up on a list I was looking at, so I compared to to NWLI. The reason for that is they are both long term asset growers with low dividend yields.
The thing that stood out is that it trades at twice the P/B, P/E of NWLI, even though NWLI has a better ROE over the last 10 years and has generated more earnings relative to stock price.
Also interesting is that if I look at the long term charts since 1995, the charts are actually quite similar until the start of 2011 when WTM began a strong advance compared to NWLI's pullback.
The main difference between WTM and NWLI is WTM is P&C/specialty insurance, so shorter tail risks and seen as less exposed to long rates. So in my mind, one of 2 things has to happen - NWLI accelerates to the upside and reduces this valuation gap, or NWLI's business deteriorates due to reinvestment issues / poor underwriting, etc.
I believe this is very simply a buy and hold and wait for sentiment to turn stock. I do see the stock well over $300 in the next few years as rates start to rise and risk is seen as being reduced in the lief insurance market.