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发帖数: 5096 | | i*********n
发帖数: 5465 | 2 We are downgrading shares of GNW to Underperform from Neutral following the
recent
rally in shares off of the bottom reached in late July/early August of more
than 100% and
over 50% since mid-November. We think that much of the rally has been the
result of
optimism for GNW’s US MI unit as a derivative play on the US housing market
, in addition
to the appointment of former Freddie Mac CEO David Moffett to the board of
directors,
while investors have been less focused on fundamentals in the life insurance
operations.
We believe that the housing market strength results in the need to reassess
the US MI
business, and as a result we are increasing the multiple on that business in
our sum of the
parts valuation to 0.95x from 0.5x (note RDN and MTG both trade at 0.95x).
Due to the
higher multiple on placed on the US MI, we are raising our target price on
the shares to $7
from $6. While we are more positive on the US MI unit, we note that GNW
still must build
capital in the segment once it turns a profit, as risk to capital remains
above the 25:1
threshold.
Despite the increase in the target price, we think there has been
disproportionately too
much emphasis placed on the housing market recovery and the impact it will
have on US
MI and not enough focus on the life insurance entities. GNW has one of the
largest LTC
blocks in the industry at about $20b of gross statutory reserves (we
estimate 2x bigger
than MET), which is not only the most interest rate sensitive line of
business but has also
started to show adverse morbidity as people on claim live longer. GNW has
used captive
reinsurance to limit pressure from low interest rates, and it is our
understanding that GNW
will not need to take any statutory reserve actions at YE12 as a result of
cash flow testing
(note reinsured business is not subject to cash flow testing), we suspect as
a result of the
use of the captive reinsurance. However, with the NAIC taking a closer look
at the use of
captive reinsurance and affiliated transactions, it is not clear to us what
the impact will be
on GNW’s ability to utilize these arrangements going forward. As Exhibit 1
shows, GNW is
the heaviest user of affiliated reinsurance among lifecos in our coverage.
As a result of the
use of affiliated reinsurance, we are applying a lower multiple to the life
insurance
operations given the added complexity and lower private market value we
think would be
associated with the business, combined with the need to add to reserves if
unwound, in
our opinion. We no longer assume a $700mm statutory reserve addition to the
LTC book
in our valuation because of the uncertainty associated with the need to
unwind captive
reinsurance. | s**********o
发帖数: 14359 | 3 6块RAISE到7块了，这评级的够蠢的，已经8块了，还预测什么7块 | i*********n
发帖数: 5465 | 4
就是叫大家赶紧抛？
【在 s**********o 的大作中提到】
: 6块RAISE到7块了，这评级的够蠢的，已经8块了，还预测什么7块
| s**********o
发帖数: 14359 | 5 这个也不一定吧，目标价只是个参考。我没有，觉得GNW主要是LIFE INSURANCE，
跟房市转暖的关系不是太大
【在 i*********n 的大作中提到】
:
: 就是叫大家赶紧抛？
| c**********e
发帖数: 2007 | 6 Sometimes the target price is lower than current price. That basically means
sell.
【在 s**********o 的大作中提到】
: 6块RAISE到7块了，这评级的够蠢的，已经8块了，还预测什么7块
| i*********n
发帖数: 5465 | 7
means
many other agencies still give positive
【在 c**********e 的大作中提到】
: Sometimes the target price is lower than current price. That basically means
: sell.
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