Life and supplemental health insurance company Torchmark (TMK)
is unusual in a lot of ways. Not only does the company have a pretty
exceptional history of returns on equity, those returns have been
remarkably consistent. The company's underwriting risk is low and not
many companies can compete in its core life insurance markets. What's
perhaps even stranger is that this supposedly defensive insurance stock
is doing quite well in a market where conditions are seen as improving
for the sector.
Even though Torchmark would normally have less to
gain from the improving economy and rising rates, these shares may yet
be undervalued. Torchmark's different model makes P/TBV valuation almost
useless, but the shares look surprisingly cheap on the basis of an
excess return model. I don't normally think to look at the 52-week high
list for bargains, but Torchmark could still offer some meaningful
upside from today's level.
Please continue here:
Isn't Torchmark Supposed To Be Defensive?
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