Metlife (MET)

They have had to put away billions of dollars in reserves, partly because they are domiciled in New York state. New York State is one of the toughest regulatory climates of any state in the US. Valuation is extremely low and the business as well diversified. Trades at 9.1X forward earnings, so it is very cheap. Dividend yield of 3.11%.

If a person wants to participate in the trend of rising interest rates, life insurance companies in particular tend to be very well positioned. An interesting way to play that trend. He prefers US banks better because of lower multiples with more room for improvement. Banks also get more benefit from improving housing markets.

Metlife (MET-N) or American International Group (AIG-N)? These are 2 relatively different companies. AIG does have a large life insurance component, but MetLife is almost all life insurance. Looking of valuations, they are both pretty attractive. When interest rates eventually start moving up, this one will probably outperform AIG. Both valuations are pretty cheap.

(Top Pick Mar 26/14, Down 0.61%) It is flirting with EBV -3. His model price is $71.00, or a 31% upside and it has a 3.1% dividend.

Metlife (MET-N) or Manulife (MFC-T). Which has a better upside? All things being equal, and if she liked both of them equally, she would prefer the Canadian stock because of the currency.

He is happy to be in the life insurance area. US rates will go up before Canadian and that will benefit lifecos.

This appears to be a bit undervalued to other insurers. The largest life insurer and one of the largest insurance and financial services companies in the US. As the recovery in the US economy continues and the labour market gets better, that will provide a catalyst to share price given the greater demand for insurance and investment products. If interest rates move up, that is also good for life insurers. Stock is trading at 9.5X PE forward with 10%-12% long-term growth. Pretty decent valuation. Yield of 2.55%.

Feels this is a decent name, but his favourite name in the US insurance space would be the property/casualty insurer Allstate (ALL-N).

(A Top Pick Oct 15/13. Up 3.83%.) He sees lower interest rates on the horizon. It is trading below his last fundamental line of $55.54 so he would only recommend this if it traded above that mark.

(A Top Pick Oct 15/13. Up 17.06%.) Model price is $72.40, a 31% upside. His program is telling him that the market likes its assets. Quite a bit cheaper than Sun Life (SLF-T) or Manulife (MFC-T).

(A Top Pick Aug 7/13. Up 8.25%.) Yields 2.65%. The large financials have been struggling, certainly through 2014, but these companies need to act well going forward, if we are going to continue on with this bull market. This is certainly a better one within the financial group.

Has a great yield and continues to do very well.

He likes the insurance sector. A simple way to think about the sector is that these are companies that fund their liabilities with their assets. In an environment where interest rates are going up and equity markets are going higher, your assets are increasing, which makes it a much easier to find your liabilities. In a rising rate environment, your liabilities are actually shrinking because your discount rate is increasing.

Doesn’t think the stock will go below $49 and the 200 day moving average.

(A Top Pick July 29/13. Up 11.67%.) This should have done a whole lot better, but has been mired by regulatory concerns. Feels the US government will be labelling this as “too big to fail”, so capital, leverage and liquidity will be constrained. He would be using this fear as a way to be buying this. Still a Buy.