Buyback Expert Banks on Genworth Financial

02/05/2018 5:00 am EST

Focus: FINANCIALS

David Fried

Editor, The Buyback Letter

Our Buyback Premium Portfolio — focused on stocks undergoing significant share repurchase programs — is up 226.06% since inception in August 2000, beating the S&P 500 by more than 140%, explains David Fried, editor of The Buyback Letter.

The latest addition to our portfolio is Genworth Financial, Inc. (GNW), a Fortune 500 insurance holding company that deals in mortgage insurance and long-term care insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004.

It operates in five segments: U.S. Mortgage Insurance, Canada Mortgage Insurance, Australia Mortgage Insurance, U.S. Life Insurance, and Runoff. Genworth focuses its retirement investment products, including fixed annuities and mutual funds, on affluent individuals. Genworth serves customers in 25 countries.

Genworth Financial is attempting to be acquired by China's Oceanwide Holdings Co. Ltd., a deal which has stalled over concerns about Chinese access to sensitive U.S. personal data.

Genworth said it and Oceanwide are working to amend the proposed deal in hopes of winning approval from a U.S. national security panel. Oceanwide agreed in October 2016 to pay $2.7 billion in cash, or $5.43 per share, to acquire Genworth.

Q3 net income was $107 million (the company reported a loss in the same period a year earlier). On a per-share basis, GNW had a profit of 21 cents. Earnings, adjusted for non-recurring gains, came to 15 cents per share.

Revenue was $2.22 billion in the period. Adjusted revenue was $2.13 billion. Genworth Financial exited the quarter with cash, cash equivalents and invested assets of $76.6 billion, up about 2.1% from year-end 2016. The company has reduced shares outstanding by 14.93% in the past 12 months.

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