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CNO Financial Group, Inc. Message Board

rpschom 587 posts  |  Last Activity: 1 hour 50 minutes ago Member since: Feb 5, 2009
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  • Reply to

    Barron's New Article

    by rpschom 2 hours 38 minutes ago
    rpschom rpschom 1 hour 50 minutes ago Flag

    Barron's doesn't mention the lawsuits nor are they discussed as important items, as they are considered non issues----they are within the norm of the "cost of doing business" in today's world. Unavoidable and if one scans through most equities in this business, they have dealt with the same.
    Usually these lawsuits take years, sometimes many years to come to conclusion and they frequently are settled out of court, with the law firms consolidating their position and settling "out of court" for a sum that benefits primarily the lawyers.

  • Reply to

    Barron's New Article

    by rpschom 2 hours 38 minutes ago
    rpschom rpschom 2 hours 35 minutes ago Flag

    We would lean toward the high end. First, Genworth's primary business, mortgage insurance, has recovered nicely from the horrors of the housing crash with a lot of the resulting mortgage loss claims already flushed down the company's alimentary canal.

    Its mortgage-insurance operation reported net operating income of $136 million in the second quarter, compared with $102 million a year earlier. Results were bolstered by a decline in claims losses as delinquencies trended lower and loan recoveries improved. Mortgage insurers face a brighter future, given the tighter underwriting standards and the various reform plans calling for a bigger role to be played by private risk capital.

    GENWORTH HAS BEEN HARD AT WORK on the long-term care front, trying to reverse previous underwriting errors. Beginning in 2012, the company has won premium increases from 43 states with more on the way elsewhere, which will boost its annual premium income by $250 million to $300 million by 2017. Genworth has also tightened policy terms, all but dumping lifetime benefits two years ago in favor of maximum benefit periods limited to three to five years.

    The Bottom Line
    Meriting a price-to-book value closer to that of its rivals, Genworth shares could be worth more than $24 each in a few years, versus $13.26 last week.
    The big problem for Genworth's LTC business remains its older block of policies covering some 331,000 lives. The policies, which were sold between 1974 and 2001, assumed a lapse rate of 5% to 5.5%, or the percentage that would be canceled over the policy's life. A higher lapse rate means Genworth would be able to pocket years of premiums and investment returns without having to pay a benefit. However, folks hung on to their policies: Lapse rates were 1% or less. Also, the company assumed premium investment returns on these policies as high as 6.75%, but yields are currently running at 5.5%.
    Genworth hopes only to break even on the policies. A recent investor figures the block of 331,000 should shrink to 123,000 policyholders in the next decade based on mortality statistics.

    Such is the calculus of the LTC business. A grim denouement for the policyholder is a boon for the investor.

  • The housing crisis, stretching from 2007 to 2010, buried its U.S. mortgage-insurance business in an avalanche of foreclosures, falling home prices, and steep mortgage-claim losses. At the same time, the long-term care insurance (LTC) business went so sour that big competitors like MetLife (ticker: MET) chose to pull out completely while Genworth (GNW) persevered. Policies, many of them written decades earlier on customers in their 50s, unexpectedly went to claim for far longer periods than expected (in part due to a surge in Alzheimer's and dementia cases) producing a sea of red ink

    Barron's saw signs of recovery more than a year ago ("Why Genworth Will Finally Reward Investors," March 11, 2013), when the insurer was reorganized by CEO Thomas McInerney. As we projected, the shares popped from $9.65 to over $18. But added worries about its LTC business have caused the stock to give back nearly 30% from its May high of $18.74. Most of the damage occurred after the release of second-quarter results in July showing a drop in operating profit from its LTC book to $6 million from $46 million the quarter before. Worse, the company said the unexpected surge in claim losses had prompted it to review the adequacy of reserves on existing claims.

    The company added that the results of the review and whether it will need to take any reserve charge will be disclosed by the end of the third quarter. The reserve news came just seven months after Genworth management had done a "deep dive" into its LTC reserves and
    "The possibility of a reserve charge has hung over the stock in recent months even though it's unlikely to be that onerous," says Compass Point analyst Ken Billingsley, who has a one-year price target of $16.50. "Some question how management can suddenly freak out over just one quarter of claims experience, which can be quite volatile. In my view, the stock market reaction is quite overdone."
    given an "all clear" determination to analysts.

    "The possibility of a reserve charge has hung over the stock in recent months even though it's unlikely to be that onerous," says Compass Point analyst Ken Billingsley, who has a one-year price target of $16.50. "Some question how management can suddenly freak out over just one quarter of claims experience, which can be quite volatile. In my view, the stock market reaction is quite overdone."

    We share Billingsley's view. First, the tangible book value per share of Genworth's stock -- even with a draconian reserve charge of $1 billion -- would still total more than $29 a share from a current $31.37, or more than twice its recent stock price. Any charge is likely to be far smaller -- maybe in the $200 million range -- that can be easily covered by the company's excess regulatory net worth with room to spare.

    We think Genworth has an excellent chance in the next few years of closing the gap between its stock price and book value by trading for at least book value, like Prudential Financial (PRU), MetLife, and Torchmark (TMK). In this case, book value excludes accumulated other comprehensive income, a balance-sheet item. On this basis, Genworth's book value is $24.31 a share, about 80% over its recent $13.26.

    True, as Raymond James analyst Steven Schwartz notes, Genworth had an operating return on equity of just 5.2% in the second quarter while its life-insurance peers were posting 10% or higher. Yet Genworth's earnings -- even with the LTC miss in the second quarter -- are clearly in an uptrend. Consensus analyst estimates are for $1.29 a share this year and $1.57 and $1.75 in 2015 and 2016, respectively. This compares with operating earnings per share of $1.24 last year and 82 cents in 2012. Moreover, management, who declined to talk to Barron's until after the LTC review is done, is still guiding to an improvement in return on equity to 7% to 9% by 2016, according to a conference call this summer.


  • Thanks Mike.

  • Cover your short position ---quite insidious post

  • Institutions are passing back and forth, between one another---borrowing shares ---to be used long and short for their option spreads and controlling the common SP.
    In today;s case, have all those naked calls written expire worthless. Then a rinse and repeat next week.
    CLF and some others are a ATM machine for the hedge funds and banks. The price could stay in this range or any range forever---they could care less, they are making fortunes every week.

  • CLF included of course.

    I would sure like to hear some specifics from our new management on his game plan.
    Sure could not hurt. Shorts are in full force, no hurry to cover, they still control the trade, IMO

  • Reply to other word...

    by pgpgo 19 hours ago

    It is the entire material sector, for the most part.
    Drillers, coal, iron ore, other metals, etc

    WS is short and all are cyclical. Obviously, the down wave is not done.
    You cannot stop it or change it until they cover and go long.

  • Reply to

    RBC---becoming a Joke

    by rpschom Sep 19, 2014 9:27 AM

    Well said and true.

  • Right now it is a trade at best. Buy again in the 13's and wait a few days, then sell the pop.
    Might not get the top or the bottom but it will be profitable.
    I am long too and just about everyone is underwater on the shares they have held.
    WS owns this trade presently as most of the material plays----and they are short.

  • Reply to

    Troim leaving Seadrill ..big loss

    by a_deshong 21 hours ago

    Most of the drillers and the entire material sectors is getting trashed today.
    WS is short and the dollar value etc contributes but they do not need a reason as they have all the money and the time, WS will want to go long---but real cheap.

    SDRL is far more than one guy and if it wasn't no one should buy it.

    Sentiment: Strong Buy

  • You are spot on correct Mike.
    They want us to chase and deal with the gaps down and so forth, read the media, while they sit on the sidelines with the money.

    If you can control the ticker numbers---all else is secondary. With their massive short position they are not worrying.

  • Yes all true.
    WS big time Naked call writers have a billion dollar ATM machine---- sideline from their regular shorting.
    They also possess billions in common shares owned or "loaned" to control he ticker----as insurance for that trade---to make sure it goes in their direction.
    The House is rigged---they cannot and will not lose.

  • Reply to

    Have to Admit

    by rpschom 22 hours ago

    Yeah guys, this is actually a game that they play-----a computerized algorithm video action game.
    I am surprised one the the manufactures hasn't marketed it for the video game aficionados for x box and playstation. One could be the MM and run the ticker annihilated all peers or enemies..

    "Trade Wars" ------"Short Attack"--------"Trade Kombat" or just "Short Stalker"

  • It is impressive the power of the WS short positions.
    When they collaborate----they own the trade. Fundamentals, TA , rationality, logic, even common sense are useless. They do not have to be "right"---they just have more money and time than anyone else.
    They control the numerics and there is nothing anyone can do about it.

    They short until there is complete distribution in a stock like WLT.
    The only good in the deal is that it allows simple players like us to buy cheap----really cheap.

    Sentiment: Strong Buy

  • 2015---2016 most likely will be turn around years . Buy early and wait, IMO.

    There is still plenty of meat and fat on the bones here in SDRL and others for WS to short---and they are.
    All else is secondary if you are initiating a position, I would wait. Material stocks are volatile and either hot or cold.
    They can push this to ridiculously low levels as buyers dry up and WS is all short---numeric point of view of the trade is what matters presently.
    Mid twenties r lower with time, IMO

  • reduces price target on RIG to 35 dollars from 42 dollars.

    late to the party

  • Reply to

    Only 33% of yesterday's volume was short.

    by kem60 Sep 19, 2014 8:27 AM
    rpschom rpschom Sep 19, 2014 9:16 AM Flag

    Very good post and reasoning , thanks.
    Agree completely.

  • rpschom rpschom Sep 18, 2014 10:48 PM Flag


    Sentiment: Strong Buy

  • Reply to

    Couple of details

    by rpschom Sep 18, 2014 5:28 PM
    rpschom rpschom Sep 18, 2014 5:47 PM Flag

    Exactly. When they go long they will run it up just to the same ridiculous levels as before.
    In this case, WLT is so cheap, one does not even have to risk much to have the possibility of a great gain

    WLT common shares are priced like a option presently.

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