The Neutered Stag Gets Cut Again?
The Hartford Financial Group (HIG), a.k.a. “The Neutered Stag,” took one on the … chin today, hitting a 10-year low.
Why “The Neutered Stag?” In a fit of political correctness over a decade ago, they trimmed their logo’s … equipment. Apparently someone found it offensive. Oh, bother.
The news flow suggests speculation caused by off-the-cuff comments from Harry Reid. Maybe.
I do know that, of the top 16 U.S. life insurers, The Hartford Financial Group (HIG) had the largest total reported realized losses ($1,220,000,000) as of March 31, 2008. Second on that list was Prudential, followed by Metlife Inc, then Allstate. That was March; this is now. That $1.2 billion included life operations only and also included $650,000,000 in impacts of adopting SFAS 157 plus $208,000,000 losses from asset sales/maturities and “other.” Bet you there’s a ton of action in the CDS market for HIG tomorrow. Not to mention the other three on the list.
Metlife Inc. and Prudential “lead the league” in derivative losses, according to that 03/31/08 list.
Interestingly, American Financial Group didn’t look too bad on that list of U.S. life insurance operations, probably because their problems were elsewhere.
No positions, as I’m trading mechanically and on EOD data, but these guys might present opportunities for the nimble - although I don’t know their status re: the “no short” list.
October 2nd, 2008 at 8:47 pm
Question: do you think W.E.B. will capitalize them with a big stake of preferreds and warrants? It IS a name brand and they arguably have a “moat” around their affinity and AARP businesses.
October 2nd, 2008 at 10:55 pm
I guess I’m a little biased b/c I work for one of the companies mentioned, but Q2 data should be out for derivative losses. It would also be more informative to look at losses relative to capital.
PRU is on the list, but I didn’t see MET or HIG unless they got added on a later list.
October 5th, 2008 at 12:48 pm
HIG was added per this news item.
Not that it means much. If someone were serious, they could open a hedged long position and later sell the long exposure to generate an economic short; think paired puts. One of probably about a half-dozen ways to do that. Not a recommendation. No position for the kid, my positions are always 100% disclosed over at The Rempel Report. As a former emp. of one of their former subsidiaries, my interest is purely sentimental.
Their 2Q is out; I took those numbers from a BestWeek report. Big net investment loss on their cash flow statement. Balance sheet took a 5.7% trim of equity on the quarter, and that’s not per share. They bought back some stock (MISTAKE!) and issued twice as much debt by dollar amount as they spent buying stock.
Their 3Q is due on 10/29. Should be interesting.
October 6th, 2008 at 6:46 am
No need to wait for 10/29.
HIG announcements today. Dramatic cut in 3Q earnings, cutting the dividend, infusion of capital from outside, and replacement of the CIO.
November 14th, 2008 at 7:21 pm
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