Hartford Financial (NYSE:HIG)
has the unenviable task of running off a multibillion-dollar portfolio
of assets through a run-off operation that is unlikely to generate
returns much above the mid-single digits. Even so, this excellent small
commercial underwriter is on a path back to double-digit ROEs as strong
underwriting results in commercial and personal P&C and aggressive
capital management add value. If Hartford can get to 10% ROE in five
years (and move closer to 12% over the long term), I think $45 is a fair
price today. I'd also note that the Hartford is an appealing asset and
its five-year performance may be moot as larger insurance companies
ponder what to do with their surplus capital.
Follow this link for more:
Hartford Financial Still Has More To Give
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