In case you need to be reminded to look closely at the books, today's poster boy for erroneous ledgers, Bernie Maddoff, should be a constant reminder. Furthermore, when you are looking at the books, remember that Benjamin Graham, mentor to "my pal Warren," advised buying stocks for less than their intrinsic value. And book value is the starting point in attempting to establish that.

Two weeks ago, I posted an update on my toxic stock picks. These were six unloved stocks where I felt the stage was set for market beating returns. The same is true again for today's market-beating group, although it is not the headlines that tied this group together, but their standout bargain metrics.

Continue reading Chasing Value: Cheap Stocks by the Book

Chasing Value: Cheap Stocks by the Book originally appeared on BloggingStocks on Mon, 16 Aug 2010 12:00:00 EST. Please see our terms for use of feeds.

It looks like American International Group (AIG) has found another $15.5 billion. The insurance company is selling its American Life Insurance Co. division to MetLife (MET) for $6.8 billion in cash and $8.7 billion in equities. Approximately $9 billion from this sale will be used to repay funds provided by the Federal Reserve, totaling $182.3 billion. This follows the announcement of Prudential's $35.5 billion designs on AIG's Asian operations.

Robert Haines, analyst at CreditSights, tells Bloomberg News, "This is a sizeable transaction." He continues, "It demonstrates they're making some tangible progress on their plan to divest assets."

Continue reading MetLife to Spend $15 Billion on AIG Life Division

MetLife to Spend $15 Billion on AIG Life Division originally appeared on BloggingStocks on Mon, 08 Mar 2010 08:00:00 EST. Please see our terms for use of feeds.

Continue reading Prudential (PRU) to sell Wells Fargo Advisors stake for $5B

Prudential (PRU) to sell Wells Fargo Advisors stake for $5B originally appeared on BloggingStocks on Thu, 18 Jun 2009 13:00:00 EST. Please see our terms for use of feeds.

MetLife (NYSE: MET) closed at $29.41. MET is speaking at the Wachovia Securities 19th Annual Mid-Year Equity Conference on June 23. MET July option implied volatility of 70 is below a level of 82 from mid-May and below its 26-week average of 92, according to Track Data, suggesting decreasing price movement.

Prudential Financial (NYSE: PRU) closed at $36.15. PRU July option implied volatility of 61 is below a level of 93 from mid-may and below its 26-week average of 111, according to Track Data, suggesting decreasing price movement.

Continue reading Options Update: Insurers volatility decrease suggests less price risk

Options Update: Insurers volatility decrease suggests less price risk originally appeared on BloggingStocks on Wed, 17 Jun 2009 09:30:00 EST. Please see our terms for use of feeds.

Continue reading Prudential says no to bailout, prefers to raise cash instead

Prudential says no to bailout, prefers to raise cash instead originally appeared on BloggingStocks on Mon, 01 Jun 2009 09:50:00 EST. Please see our terms for use of feeds.

Prudential Financial (NYSE: PRU - option chain) shares are headed higher today with other insurers this morning after the Treasury Department announced it will extend TARP bailout funds to life insurance firms. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on PRU.

PRU opened this morning at $24.77. So far today the stock has hit a low of $23.25 and a high of $25.30. As of 11:35, PRU is trading at $23.42, up 1.32 (6.0%). The chart for PRU looks bullish and S&P gives PRU a positive 4 STARS (out of 5) buy ranking.

Continue reading Prudential lifted by TARP extension

Prudential lifted by TARP extension originally appeared on BloggingStocks on Wed, 08 Apr 2009 14:30:00 EST. Please see our terms for use of feeds.

The Treasury has decided that just bailing out American International Group (NYSE: AIG) to the tune of $122.8 billion and counting is not going far enough. Now it's time to use our money to bail out more insurance companies. As it turns out, the insurers that are likely to get the money are the same ones that took a blood bath earlier this month. The companies seeking a bailout include Met Life (NYSE: MET), Hartford Financial Services (NYSE: HIG), and Prudential Financial (NYSE: PRU).

You may be wondering, what crime did I commit that makes it socially acceptable for my money to be used to bailout the insurance industry? Aren't my home, auto, and life insurance premiums up to date? If so, what gives the insurance industry the right to use my taxes to pay for their investment mistakes? Because that is exactly what the insurance companies are doing.

How so? Their books are loaded down with asset-backed securities such as mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) that vastly exceed their shareholder's equity. These securities are not worth much -- in fact, a recent report suggested that CDOs were worth 10 cents on the dollar at best. If the insurers have these stated on their books at 60 cents on the dollar, the mark to market process could wipe out a significant portion of their capital.

Continue reading More insurance bailouts on the way

More insurance bailouts on the way originally appeared on BloggingStocks on Sat, 25 Oct 2008 07:52:00 EST. Please see our terms for use of feeds.

Continue reading New highs for Disney, EMC, Abercrombie & Fitch and Prudential

New highs for Disney, EMC, Abercrombie & Fitch and Prudential originally appeared on BloggingStocks on Thu, 08 Feb 2007 13:52:00 EST. Please see our terms for use of feeds.