Hartford Undervalued And Improving In A Sector That Seems Adrift

Cheapness, relative, or absolute, rarely moves stocks all on its own. More often, it requires a meaningful change in the trajectory of the underlying business (the dreaded overused and misused word "catalyst") or in the perception of the overall sector. In the case of Hartford (HIG), management has done some good things lately - selling the Talcott business, raising prices, and boosting overall underwriting profits - but the larger P&C sector seems to be drifting without much real pricing power and worries about weaker reserves and rising claims inflation.

I continue to believe that Hartford is undervalued and worth owning, but I can't say with much confidence that it's going to be a near-term outperformer. It will take time for the market to fully reward the emerging underwriting profitability improvements and likely even more time for investor love to rotate back to insurers.

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Hartford Undervalued And Improving In A Sector That Seems Adrift