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Old 05-03-2009, 05:40 PM   Nav to Top  #1
jgarner3999
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Default Protective Life Corp. (PL)

This stock has a 52-week high of $44.38, a 52-week low of $2.81, and is currently priced at $8.30. If you seek, you will find that this insurance company has not been priced at $8/share since 1993. A 10-year chart would not show a price below $20. You will not see much volatility in this stock at overall, which I like. In addition, if you ring up the chart, you will see an irrational drop in the value of the company.

Unless this company’s business model and sector are rendered obsolete, the stock should recover. Firstly, there is nothing unusual about offering life insurance. This company does not do anything out of the ordinary besides make money on a regular basis. The sector is also attractive because life insurance (and insurance in general) will never go away.

Besides last year, this company has made a lot of money. The bet on this stock is that it will continue to do so. Last year should be taken with a grain of salt because of all the turmoil in the financial markets. You should pull up their financial statements and see for yourself. It had a bad-half of last year, but other than that, it has a solid business model and solid business sector which could revive earnings and the balance sheet yet again. Additionally, liabilities have not increased dramatically at all since the drop of the stock price.

People need life insurance to protect against what they don’t know. Life insurance does not cost very much money and makes people feel wealthier. The theory is that people will want to have life insurance policies in order to feel wealthier than they are. Additionally, people who already have life insurance policies now are unlikely to cancel them because that would require losing what they have paid into the policy and losing something they have looked at as an asset.

Additionally, insurance companies that have been hammered recently but still have good business models are always choice candidates for take-overs. With a market-cap of $580M, a holding company could purchase a company such as protective life and receive all of the benefits from owning a life-insurance company at a fraction of the cost.

Protective Life is less than 20% of its 52-week high. It is about 300% from its 52-week low, which it hit (not surprisingly) in early March of this year. If I owned a large holding company that had a portfolio of life insurance companies, I would choose this one over its competitors. It is so far off the premium it was trading for, I would feel confident the price I would pay for it would be justified by a solid business model and industrial sector. I recommend building into a position rather than buying all at once, as is a wise decision when purchasing just about any security.

Last edited by jgarner3999; 05-03-2009 at 05:43 PM..
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Old 05-03-2009, 09:07 PM   Nav to Top  #2
Prentiss
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Interesting... at what level would you suggest someone buy at?
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Old 05-03-2009, 09:09 PM   Nav to Top  #3
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It would also be helpful if you provided links to the things you reference in the post, such as

charts and financial statements.
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Old 05-03-2009, 10:53 PM   Nav to Top  #4
jgarner3999
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I wanted to edit my post with the comment that life insurers have a potential for TARP relief funds, thus adding fuel for this pick. Here is an article for that: Can life insurers get TARP to revive economy? (Dealscape)

@Prentiss: This might not seem right, but I am not a "nickel and dime" type of guy. I like to think of big numbers, so you can start adding to your position now (possibly 1/3 funds available for this position) and wait then add more.

@Chuckd:

I use Google Finance for long-term charts and financials. Here is a link to the 10-year chart:
PL - Protective Life Corp. - Google Finance

Here is a link to the financial statments:
Financial Statements for Protective Life Corp. - Google Finance

@Lattes: Books look solid just a bad last half of last year. We'll see if that continues but I believe in this industry and this company. & See My Reply to chuckd.

Last edited by jgarner3999; 05-03-2009 at 10:57 PM..
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Old 05-03-2009, 11:55 PM   Nav to Top  #5
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Good job with all the links Jgarner, thanks
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Old 05-04-2009, 12:20 AM   Nav to Top  #6
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Great post edit JGarner, and great infos, i will keep this one in my watch least and probably get into when funds clear...You are very right about one thing, people can not do without life insurance...Indisputable..
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Old 05-04-2009, 12:38 AM   Nav to Top  #7
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Single people CAN do without life insurance!

However, I do see the potential in this pick, I'll add it to my watch list.
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Old 05-05-2009, 03:35 AM   Nav to Top  #8
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DAMMIT! A little late on this one! Nice little jump today. And they announced a quarterly dividend to boot. What do you guys think, too late to get in, or just the beginning?
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Old 05-05-2009, 06:14 PM   Nav to Top  #9
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It's best to average into positions anyway. So you would've only exposed about 1/3 of your position to the 20% jump. I can't believe I didn't notice they were reporting earnings, I was really upset with myself for not noticing that because I couldn't put it in my analysis. I'm probably more upset than I should be about not including it, but oh well. Still a long-term hold. A boring little company that has a knack for making money. ::Yawn::
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Old 05-07-2009, 04:22 AM   Nav to Top  #10
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I like this one too and gonna watch it.

Thanks jgarner!
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