Brighthouse Financial Inc. (BHF-Q)

(A Top Pick Aug 14/18, Down 17%) This was spun out last year from MetLife. It is the personal life side of the business. He sold it early in the year. As interest rates were going higher it made sense to own, but as rates moved lower he exited.

(A Top Pick August 18, 2017. Down 30%). This is a spinoff from MetLife. It is the personal insurance part of MetLife. The whole insurance group is down this year in double digits.

This is the personal insurance business that was spun out of MetLife. Usually when companies are spun out, they go down for a while. However, there have been additional issues for this company. Interest rates have not gone up as expected. And the industry has been tarred with the brush of long-term care insurance costs and Veterans’ Affairs stuff. Brighthouse is not in the long-term care business but its price has been affected by the general concern and by the guarantees associated with Veterans’ issues. Brighthouse now trades at a significant discount to book value, about 0.4x, down from an earlier level of 0.7x. He considers this discount extreme. Brighthouse doesn’t pay a dividend or buy back shares, and won’t do so until 2020, so it is for patient investors. (Analysts’ price target is $49.69)

It is a brand new company. It is the retail division of Met Life, who will continue with institutional life insurance. BHF-Q is doing variable rate annuities and personal insurance. The stock went down because some sold off the stock they received from the split up because they did not want to be bothered with it. They don’t yet pay a dividend and he does not see one until at least 2020. They will benefit from rising interest rates. (Analysts' target: $69.50).