Sunday, May 15, 2016

Looking around for great values and found MetLife Inc. trading way below current book value and that pays a nice 3.72% dividend. Too big to fail? Not according to the judge. Feds are fighting the ruling.

Dow Jones Industrial Average 17,535.32 (Down) Week ending 05-13-2016

When us Philadelphia Eagles fans drive up the Jersey Turnpike towards New York or New England we will inevitably pass by the N.Y. Giants football stadium with it's sponsor's logo on the front of the stadium, "MetLife". Now us Eagles fans aren't real kean on those NY. Football Giants because we play them twice a year and the games are very "Physical" because of our rivalry in the NFC EAST division, (which also includes the Dallas Cowboys and the Washington Redskins).

I have however taken an interest in the company that sponsors their stadium, that being MetLife Inc. (Symbol MET, $42.99). The company trades at an amazing low Price to current book value of 0.62 with the current book value at $68.83 per share. Part of the reason for this situation is because since the 2008 financial crisis the government had deemed them as "Too Big to Fail" and had added regulation and high capital requirements that the company had to abide by.  Well last month in court a judge had over-ruled that decision and declared that MetLife Inc. would no longer be under those rules and regulations and that they are free to run their finances as they wish. I hope that this will be a key catalyst to the stock price.

Well that has the "Snoopy Dog", the MetLife mascot symbol,  jumping for joy. Here are some of the numbers that the company sports:

A Peg Ratio of 0.78 well below my 1.5 criterion.

Earnings per share for 2016 are projected at $5.48 per share and for 2017 projected at $6.04 per share.  That is a current PE ratio of 9.21 and a forward PE of 7.12 , well below the current market. The expected 5 Year earnings increase is forecasted at 11.80% per year.

The ROE, return on equity has been low because of the regulations but that should rise in the future with the new financial freedom. 

The P/FCF Price to free cash flow is 4.55 , which is well below 10. The company did sales of almost $70 billion dollars in 2015 so there is allot of energy for forward synergy here. 

The company pays a nice dividend of 3.72% , so MET pays you a decent wage even if it doesn't rocket up right away. 

Zack's company says that analyst ratings are 9 Strong Buy and 2 Buy with 3 Hold ratings on the stock. There is a target price on the stock of $51.07 , but I would hope that the company could return to at least "1 times book value" which would be $68-69 dollars a share.

I would say that you can buy it right here in this rocky stock market. So take a little ride on the MetLife blimp and see your assets rise up also.

Have a great week. Sorry I have not been posting every week. It is not because of a lack of interest, but more about being very very busy. Always keep some money on the side lines , (10% to 15%) for good buying opportunities. 


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