I did say the book value was above the share price but a lot of insurance companies are in this situation. AIG is at 0.75BV. GNW is below 0.5BV. So even if PNX BV at $65 does not support share price of $55. That is why I am asking how anyone could know what to pay. This stock should be at a steep discount to insurance industry which itself is at a big discount to historical averages.
I am short. Not enough to matter. I am not a big fan of shorting. PNX is up today, but on what information. I feel like shareholders are being bamboozled here. You have been asked to hold your shares for 2 years while they try to get the books right. Then, they supposedly want to sell the company without even telling you what the books actually are. Management would probably do pretty well in a buyout. Some will go but some will be enriched by this process. I find the article troubling that a company in the middle of restating can seek a sale. The potential buyers would get access to the books that you and I cant see. I could see this being a manipulative event. Someone buys in, falsely spreads a rumor to makes the stock jump and quietly moves on with their profit. Later, the stock takes a fall. In terms of being dead wrong, on a percentage basis I have done well on this stock but always from the long side.
Happy birthday. I am now short as of today. Putting themselves up for sale is an admission that things are way worse than even I realized. It apparently is in the best interests of everyone involved to find a well capitalized buyer to try to save this place. I am sure there is value in the platform, the people, the brand, and maybe even the runoff of the existing book of business. However, at a discount. Any buyer is going to want a return. My goal is to make a quick 10% and cover.
Why let your money waste away when exciting stories are out there. For example, Gilead cured Hepatitus C. And now their stock is going through the roof. Some price targets are 50% higher than the stocks current price. At 10x earnings and a triple digit growth rate the price targets seem justified. PNX might have another day in the sun but it will not be now. PNX is a poorly run company in a cold industry. This is a pure value trap. Their tax assets and DAC are worth very little. This stock will get pounded far more than the market in a selloff. Price target $30
Sentiment: Strong Sell
You are definitely a pumper. Not a great one. I am checking in less and less because this is so painful. To busy owning financial instruments like MLPL that are at all time highs, yielding huge dividends and with more upside, not companies taking 2 years to think about how they are going to explain their faulty accounting. I am reiterating my target of $28/share. PNX's run up is due to the market runup. If the market pulls back 10% look out below. If this thing hits $60 I will become the only actual short on this board. In the meantime I will try to be the voice of reason.
I am back for a second. There is a dirty little not in their disclosure. They mention they have incurred $23M or so in restatement expense for the quarter that they haven't paid for. I bet that is not in statutory earnings and surplus either. Yikes!
Don't have time to today to say much. While the results were positive, more positive than I would have believed, they are misleading. First of all, deferred acquisition costs. In stat accounting, they are expensed immediately. So in a run-off like state you will not have the high commissions hurting your earnings. Second, these are the earnings of the operating companies and do not include interest expense on the $250M in debt. Also, you stat surplus or in normal speaking equity is not including said $250M of debt.
I definitely don't believe company will go bankrupt. $28 is just my opinion based on the high volatility, thin trading volume, small float, and belief that when the financials are published they will not be that great. Company is about break even on a cash flow basis.
If an abandoned house in Detroit sells for $10k is it a deal? Well PNX is the stock market equivalent. No income, no growth, no brand, no competitive advantage, overvalued on price to tangible book. Yet you assume it must be manipulation. I am holding out for $28 because only then in MY OPINION do I think the concept of value even begins. Get off the price to GAAP book. I know PNX shows up in the filters as having a low price to book. Let it go. Deferred Acquisition Costs don't pay claims. Deferred Tax Assets don't pay claims. I am clicking Hold because if the market goes up PNX tends to run with the market. In my OPINION, the stock can trade anywhere between $28 and $60 in a relatively short amount of time. However, when the market sells off this thing goes down hard. $38.49 is pretty close to the middle.
You guys sound like weak hands. mReit dividends are stable and rates are benign. Get your hands off the trigger. I own CEFL and MORL as well. Just DRIP and sit back.
There is a ton of money in working for bankrupt companies companies. Retention bonuses, people leaving creating opportunities for those who stay, company getting bought/re-emerging from bankruptcy. Joining a successful company with 100,000 people is not a way to get ahead. So yes, a talented smart person would accept a job at PNX...........until a better company offers more money!