Amid Flaws, ING U.S. (VOYA) is Too Cheap to Pass On - Barron's
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ING U.S. (NYSE: VOYA) is up in early trading following a bullish report in Barron's over the weekend.
Shares are undervalued, trading at just 60 percent of its estimated book value of $41. Estimated value exclude unrealized investment gains. ING U.S.'s total book value is at $55.
ING (NYSE: ING) spun-off the unit into its own public entity as a requirement of getting bailout funds from the Dutch government in 2008. ING must cut its stake in ING U.S. to 50 percent by the end of next year and be completely out of its by the end of 2016.
Analysts think that ING U.S. is so cheap that it is easy to overlook flaws, which mainly stem from the life-insurance unit, including variable annuities. Other issues include ING's stake and low returns.
ING U.S. administered $214 billion of assets in its retirement-services unit at the end of 2012, while managing $117 billion in assets. It runs $42.5 billion of variable annuities, which have tough guaranteed to meet when stocks fall. Pre-2009 variable annuities have been segregated into closed blocks, have hedged market risk, and put aside reserves o about $6 to meet obligations.
So, amid some weak areas, ING U.S.'s core business should cause investors to take another look. Shares are up 5.3 percent early.
Shares are undervalued, trading at just 60 percent of its estimated book value of $41. Estimated value exclude unrealized investment gains. ING U.S.'s total book value is at $55.
ING (NYSE: ING) spun-off the unit into its own public entity as a requirement of getting bailout funds from the Dutch government in 2008. ING must cut its stake in ING U.S. to 50 percent by the end of next year and be completely out of its by the end of 2016.
Analysts think that ING U.S. is so cheap that it is easy to overlook flaws, which mainly stem from the life-insurance unit, including variable annuities. Other issues include ING's stake and low returns.
ING U.S. administered $214 billion of assets in its retirement-services unit at the end of 2012, while managing $117 billion in assets. It runs $42.5 billion of variable annuities, which have tough guaranteed to meet when stocks fall. Pre-2009 variable annuities have been segregated into closed blocks, have hedged market risk, and put aside reserves o about $6 to meet obligations.
So, amid some weak areas, ING U.S.'s core business should cause investors to take another look. Shares are up 5.3 percent early.
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