Prudential Financial Inc

PRU-N

NYSE:PRU

75.45
2.07 (2.67%)
Prudential Financial, Inc. is an American Fortune Global 500 and Fortune 500 company whose subsidiaries provide insurance, investment management, and other financial products and services to both retail ...
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Analysis and Opinions about PRU-N

Signal
Opinion
Expert
DON'T BUY
DON'T BUY
April 12, 2016

When you buy a life insurance product, they have a long tail risk i.e. most of the people are going to live a long time. The company has to invest your premiums so that eventually they have assets to pay off the policy. They used to buy long bonds, which yielded 4%-8%, but now yield 2%. Because of this, insurance companies have been shopping for other long lived assets like apartment buildings, shopping centres and infrastructure assets. There is not as much liquid in them and they are harder to trade. Lifecos have had a hard time making up for those low interest rates. Because of this, he would prefer banks and casualty insurers. Sees this as a dead sector for the next couple of years.

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When you buy a life insurance product, they have a long tail risk i.e. most of the people are going to live a long time. The company has to invest your premiums so that eventually they have assets to pay off the policy. They used to buy long bonds, which yielded 4%-8%, but now yield 2%. Because of this, insurance companies have been shopping for other long lived assets like apartment buildings, shopping centres and infrastructure assets. There is not as much liquid in them and they are harder to trade. Lifecos have had a hard time making up for those low interest rates. Because of this, he would prefer banks and casualty insurers. Sees this as a dead sector for the next couple of years.

DON'T BUY
DON'T BUY
March 2, 2016

(US banks or lifecos?) He would be cautious with both US lifecos and banks. Both have a lot of pitfalls. This one is certainly well run and has a global footprint, but it is just tough on their balance sheet right now with where yields are.

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(US banks or lifecos?) He would be cautious with both US lifecos and banks. Both have a lot of pitfalls. This one is certainly well run and has a global footprint, but it is just tough on their balance sheet right now with where yields are.

PAST TOP PICK
PAST TOP PICK
July 2, 2015

(A Top Pick June 9/14. Up 1.26%.) Still adding to his holdings as he is very confident that this will go up over time. This is a good example of a financial company in the US that is benefiting from nice secular tailwinds. A good, long term investment.

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(A Top Pick June 9/14. Up 1.26%.) Still adding to his holdings as he is very confident that this will go up over time. This is a good example of a financial company in the US that is benefiting from nice secular tailwinds. A good, long term investment.

TOP PICK
TOP PICK
May 21, 2015

(Top Pick Jun 9/14, Down 1.32%) He was early. It trades at a reasonable valuation and you should see a better return of capital to shareholders over the next year or two. The valuation is attractive. Last quarter they reported a favourable capital position, which was held against them until now. More and more big corporations are off loading their pensions to companies like this one.

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(Top Pick Jun 9/14, Down 1.32%) He was early. It trades at a reasonable valuation and you should see a better return of capital to shareholders over the next year or two. The valuation is attractive. Last quarter they reported a favourable capital position, which was held against them until now. More and more big corporations are off loading their pensions to companies like this one.

COMMENT
COMMENT
February 4, 2015

Insurers make their money in 2 ways. Basically selling insurance and hoping that losses are less than what they got on the premiums, but also make money investing the premiums while waiting for the loss experience. When interest rates are high, it is easy for insurance companies to buy very safe bonds, invest those unearned premiums and rake in the spread. However, when they are low, it is tough for them.

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Insurers make their money in 2 ways. Basically selling insurance and hoping that losses are less than what they got on the premiums, but also make money investing the premiums while waiting for the loss experience. When interest rates are high, it is easy for insurance companies to buy very safe bonds, invest those unearned premiums and rake in the spread. However, when they are low, it is tough for them.

TOP PICK
TOP PICK
June 9, 2014

Represents good value relative to Manulife (MFC-T) and Sun Life (SLF-T). Trades at a discount to BV, while the other 2 trade at a bit of a premium. Feels there is the secular trend of companies outsourcing their pension benefit obligations. Regulatory headwinds are now behind them. A globally significant financial institution. Capital requirements look like they are not going to be all that onerous, which enables them to buy back more stock. Hopefully, within a few months, you should see an announcement regarding a buyback. Dividend yield of 2.38%.

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Represents good value relative to Manulife (MFC-T) and Sun Life (SLF-T). Trades at a discount to BV, while the other 2 trade at a bit of a premium. Feels there is the secular trend of companies outsourcing their pension benefit obligations. Regulatory headwinds are now behind them. A globally significant financial institution. Capital requirements look like they are not going to be all that onerous, which enables them to buy back more stock. Hopefully, within a few months, you should see an announcement regarding a buyback. Dividend yield of 2.38%.

BUY
BUY
August 25, 2008
(Market Call Minute.) Going to be an interesting speculative play.
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(Market Call Minute.) Going to be an interesting speculative play.
TOP PICK
TOP PICK
May 28, 2004
A company that focuses on earnings. A growing area particularly as baby boomers are aging.
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A company that focuses on earnings. A growing area particularly as baby boomers are aging.
DON'T BUY
DON'T BUY
September 13, 2002
Very low multiple to book value. Has good potential for upside, but only getting 7% of equity which is ineffecient.
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Very low multiple to book value. Has good potential for upside, but only getting 7% of equity which is ineffecient.
Showing 16 to 24 of 24 entries