Splitting Up The Business May Finally Unlock The Value Of Prudential's High-Quality Asian Operations

Despite a transformative de-merger announcement, Prudential PLC (PUK) (PRU.L) hasn’t been a great performer since my last write-up on the company in January. The U.S. ADRs are down about 5%, lagging the British local shares and rivals like Aviva plc (OTCPK:AVVIY) and AIA (OTCPK:AAGIY), though outperforming MetLife (MET) and Lincoln National (LNC) over that period.

I continue to believe this is an undervalued insurer, and perhaps the separation of the UK & Europe business from the much faster-growing Asian businesses (as well as the African and U.S. businesses) will prove to be a case where the parts are worth more separately than together. While there are some valid worries about the U.S. variable annuity business, the Asian business continues to generate strong growth, and I believe these shares are around 15% undervalued.

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Splitting Up The Business May Finally Unlock The Value Of Prudential's High-Quality Asian Operations