Hartford (HIG) May Benefit From Weak Yen; Stars Line Up For 2013 Rally

January 3, 2013 1:02 PM EST
Get Alerts HIG Hot Sheet
Price: $48.54 +0.43%

Rating Summary:
    10 Buy, 11 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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Last time the yen strengthened relative to the U.S. dollar, Hartford Financial (NYSE: HIG) stock declined. At the time, investors worried over guarantees extended in its annuity contracts. The company has a very large Japanese variable annuity book with ultimate payments due in yen even though many of the underlying annuity assets were/are invested in dollar, notes MKM analyst Harry Fong.

"If one believes the yen will continue to weaken against the U.S. dollar, one might expect Hartford to once again outperform," said Fong.

Fong has a Buy rating on Hartford Financial with a $28 price target.

In a separate report, MKM Chief Market Technician Katie Stockton pointed out that a recent rally generated a breakout above the October high and 50% retracement derived from the 2011 downtrend.

"We expect the breakout to be confirmed (on a consecutive weekly closing basis) because HIG has positive short and intermediate-term momentum, based on the MACD indicator," said Stockton.

The next resistance on the chart is approximately $24.75. She thinks it will also be exceeded in the months ahead, which would target the 2011 high at $31.08.

"Overbought conditions are a reflection of positive momentum, in this case, and we think they are sustainable," she said.

For an analyst ratings summary and ratings history on Hartford Financial Services (NYSE: HIG) click here. For more ratings news on Hartford Financial Services click here.

Shares of Hartford Financial Services closed at $23.71 yesterday.

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