One other aspect from a sort of contrarian viewpoint. I do not believe the institutions presently invested or holding GNW are waiting for Mr McInerney's long term turn around of the LTC division. I doubt many even think it plausible.
Investors like Ken Griffin from Citadel and others are in this roulette game for the potential positive action in restructuring, a split or some other combination.
If none of the above pans forward, I doubt very much they hold their positions for years while Mr McInerney does a trial and error every quarter with new unforeseen losses and setbacks. It will not matter how many third party evaluations he has to make LTC profitable.
Reminds me of the Frazier days with USMI fiasco and the Eisman confrontation on the CC. They will sell their long positions, short and we could expect new lows. At that juncture, Mr M knows he would be looking for a new job and GNW will start another round of it's roller coaster--- albeit at lower heights.
Few ideas. Just my opinion or speculation but an large activist investor might first have wanted to know the actual numbers of liability for LTC that were recently provided from the third party analysis. It was brought up in previous CC by an analyst that LTC was far under capitalized than what GNW had allowed. Smart guy. Truly a large oversight or actuarial miss from GNW management but part of the reason other companies dropped LTC sales, IMO.
Two, Mr McInerney is still overall new on the forefront and has had quite a roll of success.....until recent, when a big shoe dropped from the capitalization/loss of LTC. He was a "golden boy" (great bonus too) of sorts with the fast run from 4 to 18 dollars, then even somewhat underplayed the major loss that was about to unfold. It is only as of late with these valuations really that investors want some kind of big change or restructuring. Before that----most investors were very delighted and content, even waiting for a dividend. Who would have wanted change or a split from an activist investor.
Today, LTC is the present hang up or new crux of the deal or non deal for a split of the company, IMO. McInerney is committed to LTC with a very long term tome horizon but as SP lingers or retracts at these low levels, the pressure is on him from behind the
scenes--- from some large institutional players and that is the reason for the new analysis.
Not sure too many have faith in his ability to turn LTC profitable, let alone the total drag it is to the rest of the company while he tries for years.
Read the article too--- in Forbes if we are on the same page and they make good points. They still have to actually sell those policies---regardless of how GNW management has improved or protected pricing. Expensive, IMO. why at best it is a "maybe" for profitability. It is a rough business and would be better to jettison LTC or split. The company needs to streamline and simplify, IMO.
I do expect interest rates to rise and that will be a positive for the investment portfolio income. When the 10 year rate pops it usually helps the SP--- for good reason.
Since as we know our price is primarily controlled by institutional investors, the weekly money flow levels are indicative of what they believe, IMO (they take and hold positions where they believe hold positive gain). Overall we are at good levels, above zero and rising continuously. Far above the lows from the initial bad news.
The fact that management is going to pay down debt and is in the process of strategic review by third parties leads me to surmise that a sale or restructuring is clearly in the future. They are also fully aware of all the rating implications and necessary action to correct such. I am also sure many such institutions holding GNW are on the same page and hence the stronger money flow positions.
Shorter term this will have volatility as there are still plenty of unknowns and as such is a great trade vehicle with a large float----we will attract many short to mid term traders for the pops and dips.
Longer term, the institutions---all IMO--- are still in the game as there is plenty of value to unlock for GNW--in spite of all the rating downgrades, poor earning results, past management actuarial errors.
Who knows. maybe Mr Mcinerney can even pull off a successful and profitable rehab of the LTC division. Maybe.
Very strange chart for the the CMF--Chaiken Money Flow---still on a steady and negative slope downward since earnings on stagnant or slightly elevated price. Volume is anemic or very low. Puzzling IMO--- but looking for footprints from theses bankster crooks.
Short positions covering in stealth daily slow moves or longs exiting while keeping price stagnant. I vote or hope the former but time will tell. The big banks and hedge funds control this like one of their ATM machines.
Sentiment: Strong Buy
I hear you Whbog.
As an investor one cannot turn their back for a quarter, a week---- heck not even a couple of days before there is some kind of major negative fundamental news in one of their divisions. I can easily understand why institutions have valued GNW to these levels. Most of the other insurance stocks have long prior figured out how to correct the deficiencies in their business model and are presently paying a sequentially increasing dividend to the common shareholders. In addition,they have a share buyback program in place for shareholder value. In regards to book value, they also trade multiple % higher than GNW.
If there was a "lemon law" similar to a car for equities----GNW would be recalled and replaced.
If we were a circus, GNW management would have a hard time with a one ring act----sure not a three ringer.
Basically, what they are good at.......................is forever finding and stepping in a pile of "manure".
Then shoot the sh_t for the investors in a elaborate display during the CC.
The Street will eventually force these ding-a-lings to a sale or restructure.
JMHO, looks like MM action from the rise after earnings on multiple days. A retrace for day or so.
Shake out of weak hands as the old saying goes or allowing institutions to initiate or add on the weakness at a fibonacci level from the rise---61% is about 8.19. There is also a gap around earnings day if one is inclined to follow such. Not sure it gets there but today does demonstrate how easy it is to move price in GNW.
We are due for this retrace, IMO. Nothing goes up in a straight line and -----besides, GNW always is able to find or fall into another hole or needs another repair in a division, to help this cause. Book value is book value---but not trading upon it today.
That is exactly what I am "hoping"----basically the long institutions are holding their shares. Shorts have attacked full strength after earnings---media blitz, downgrades and all the usual BS software trading. Still no volume for sellers, just shorts trading against themselves. tells me that any good news---especially a resolution of BL and buyers come in---we get a massive squeeze.
CMF money flow was some stealth WS shorts covering while trying to pump price higher or keep it steady . Small shorts will get both barrels. JMHO
Sentiment: Strong Buy
What I find interesting is that since earnings----which overall IMO was very positive -----the CMF money flow on the chart has been on a beautiful negative decline slope while price has risen or stayed steady. Definite divergence. Not really sure of actual implications as there is so much under the table action with the institutions in CLF but I am hoping that it represents covering. Of course the opposite ideology is that longs are exiting on steady or higher price. Time will tell.
Sentiment: Strong Buy
BMO upgraded the entire oil services sector to outperform today.
The pendulum will swing as there is far more profit to the upside than the down.
Might take time while the big guys get on the same page.
Agree Joe, the SP movement is more than just a oversold pop from quarterly and LTC news that was anything but negative. Including the Moody's downgrade. Even if one tries to spin a positive from a negative.
My guess is there are some quiet discussions with "key" large institutions or quiet whispers behind closed doors kind of action ----such that we have seen good accumulation. Same with the previous Citadel large shareholder position even before the quarter results. Ken Griffin is no slouch and I am sure he would not invest a large position without a pretty clear potential and game plan from management. Same with Fidelity and other big players.
Cheers for at least hoping for some good action by Mr McInerney for shareholders.
So far so good, slow and steady rise is perfect, IMO. There are no accidents.
Sentiment: Strong Buy
Agree, I feel the same. I "sensed" more possible action along those lines form management. They should get something together---whatever, it has been a very long time of disappointments for longer term shareholders. Now they are faced with a major Moody's downgrade after losing half their market cap.That should negatively impact debt and future sales. Also a long way from initiating a common dividend and/or a share buyback program for shareholder value. Ridiculously poor performance from very highly paid professionals, IMO. Hardly progress. GNW has been a terrific "trade vehicle " but a lousy longer term investment.
If they cannot figure a plan to get value from this company--- I am sure a activist investor could twist their arms, even with a threatened or actual shareholder vote. Certainly happened in other equities.
Agree Side---and the financial planners do not reccomend B rated companies for the obvious and good reason------poor risk. Professionally they should not.
There is a plethora of high rated, well run companies to select or recommend as alternatives. Most of these same comparitive companies (GNW's peers) are also creating shareholder value by incorporating stock buy back programs and increasing dividend payouts to the common shareholders. Don't hold your breath for those from Tom.
GNW is just........ "another day older and deeper in debt". :-)
We are on the same page Six.
There is always another hole that they fall into or have to dig themselves out, usually by selling a good asset. The actuaries, higher management, their entire business model. The holes are getting deeper and their options are fewer IMO. It will take time and good results I believe before there is even trust of the present management.
Today we have Moody's downgrading the rating to junk affecting both the debt and the life. Hardly positive.
Book value becomes meaningless when there are such continual major setbacks.
Restructure to attain some lasting shareholder and company value.
Long overdue. Institutions are tired of their song and dance of horrible surprise multi division losses, lame excuses of what happened (it is entirely their responsibility) and weak indecisive game plans to correct what never should have happened in the first place. Yes we had an oversold pop today in SP, sort of a relief rally to celebrate that we didn't fall into a bottomless abyss but time will tell if institutions continually want to buy this quarter ---still plenty of unknowns and previous bad results.
Diversity is only positive-----IF---- there is individual strength in the different divisions, such that a weak division does not overshadow and draw down the positive results on good performing divisions. This is especially true presently and in the past with GNW. Their loss and capital insufficiencies created far more uncertainty and fear/panic with the institutions than their good performing assets. They flat out sell and reevaluate later.
From a overall survival standpoint or restructuring there are positives with multi divisions but at quarterly earnings the street always (past and present) have their intent focus upon "weakness" and loss.
Hence, IMO---GNW would be valued far higher in SP if McInerney was able to restructure this company and more easily allow street valuation. This has been brought up at numerous CC. Time will tell but we certainly did not trade down to 1 dollar from the first decline, 4 dollars from the second and 6 dollars from the third------because of strength in the multi divisions. It was the loss and ensuing fear and panic in one of the divisions each time, that led the institutions to sell in a heartbeat.
Sentiment: Strong Buy
Looking very nice and encouraging this morning----looks like the street has done the "bad results priced in" viewpoint. I am sure there are many that are puzzled from the results and ensuing gap up in PM.
Cheers to all fellow longs that bought or held long.
Sentiment: Strong Buy