The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Damofarl, I too am a Pru and now JXN holder. I cant believe how cheaply it was valued when it was demerger from Pru. I was expecting USD50 on day one not 25, but the timing was poor…I think US regulators stiffed the Pru by insisting on capital being retained in the business (pru was expecting a $2bn dividend and had to do a fund raise)…strangely some of this capital is now being paid out in buy backs…..
It will be interesting what effect IFRS17 has in smoothing the profits…..this might be a catalyst to reassure markets and allow a re-rating.
There is generally little knowledge of the US retail market in the UK, so we just look at how it goes in the US markets….
A buy under $50 for me….
As this US share is sp****ly known here, and even less posted on, thought I'd write a quick synopsis of Jackson (JXN), of which I'm a big fan.
I'm a holder, having previously held (UK) PRU shares and received them in a spin off, and there must be many many PRU holders who have these, (who sporadically mention on the PRU board), but I have gone on to buy more on a couple of occasions.
I'm generally a yield and/or value investor, and see growth stocks generally as an illusionary continual promise of jam tommorow. I prefer a little jam every day. Unusually I see JXN by virtue of it's business, of being undervalued/underfollowed as potentially a high yielder that could also see considerable SP growth.
In a nutshell, it's a pension/annuity provider, taking fees along the way for providing a promissory level of income/payout. In some regards it shares some similarities to PNX, albeit they are more managing live policies/plans rather than running down/realising them.
Plus sides - their ongoing fee income is substantial, this year alone being over half their mkt cap.
Continual market with increasing life expectancy, growing aged population.
Well respected, award winning in their market, a market leader in a disparate market (Lincoln National is a comparator/competitor).
Current yield 5% plus with buybacks in operation.
Downsides - little stand alone reporting/accounts due to recent spin out suggests no history/longevity of success/profitability, despite being long established/a household name.
Consequently little analyst/financial coverage/awareness compounded by, in US terms, JXN is a minnow not worthy of coverage/investment.
JXN extensively deploys options to underpin it's obligations, which in accounting terms are reported in quick one time terms, often resulting in very large headline losses, that frighten the mkts, seemingly being detached from the longevity of fees, policy success they are underpinning.
Being in US terms a minnow it is subject to a large short interest that would ordinarily ring alarm bells here in the UK, having recently been 12% but sharply reduced recently to around 4%, and this can cause sharp gyrations 10/15% in a week, so not for the faint hearted - I've been down AND up 20% in 6 months.
The company has non obligated cash at hand equal to 15% of it's market cap, a p/e of less than 1 and yields 5% in a market, which has no end.
I strongly believe that within 3 years the annual cash throw off will constitute a 10% yielder, for the patient.
Hope this helps someone, engenders some discussion with PRU holders and others, away from, distinct from the PRU board.
Tom78; hope you held your nerve - even those $38 buys are in the money now!
Still a volatile share, but thankfully recently that has been decidedly up. Still can't believe how undervalued this is, being in US terms, a small cap, it gets minimal coverage and can be subject to considerable short activity (albeit recently down from above 10 to around 4%).
I generally invest for yield, and whilst it is currently quite high for the US, I believe within 3 years this could transpire into a 10% yielder. It is for that reason I am undecided as to whether to trim a little of my current SP profit (mindful of it's gyrations) or hold completely for long term yield appreciation. 3q/year results due end of February and has risen early/sharply into those.
Any thoughts Tom, anyone?
tom78; good results, and the mkt responded accordingly.
The key for any investor here is......."Cash and highly liquid securities at the holding company of over $800 million at the end of the quarter. This is above Jackson’s minimum liquidity buffer of $250 million", or in other words even with "pedestrian " earnings of $2.52 a quarter, thats 3 years for the full market cap - with $550 spare cash to buffer economic circumstances.
I'm not one for euphoric statements, but this is so so undervalued it beggars believe. Feel this could be a slow but sure burner, one for the patient. Yes SP growth, but my interest is that i think this will become an exponentienally amazingly high dividend yielder for medium to long term holders.
Key Highlights
Net income of $2,903 million, or $32.56 per diluted share, including the impact of non-economic hedging results under GAAP accounting
Adjusted operating earnings1 of $225 million, or $2.52 per diluted share
Total annuity account value of $208 billion decreased 17% from the second quarter of 2021 primarily due to lower equity markets
Continued progress in the registered index-linked annuity (RILA) business, with second quarter sales of $490 million, up from $199 million in the first quarter of 2022
Returned $116 million to shareholders during the quarter through $66 million of share repurchases and $50 million in dividends, in-line with full-year capital return target of $425-$525 million
Increased capital position at the operating company level, with an estimated Risk-Based Capital (RBC) ratio at Jackson National Life Insurance Company (JNLIC) up from the first quarter of 2022 and above 450%
Cash and highly liquid securities at the holding company of over $800 million at the end of the quarter. This is above Jackson’s minimum liquidity buffer of $250 million.
Successful completion of $750 million senior debt issuance and retirement of the last remaining interim financing facility
Dividend held at $0.55 for the quarter.
Earning release today after US market close, lets hope it's showing signs of improvement!
tom78; likewise! and another 4% drop today......this was the last quarters figures, the next is due in a month.
The continual dropping is unnerving, but i'm holding fast..even with the nearly halved operating earnings, that annualised for just a year, with cash at hand are greater than mkt cap. I just can't fathom it, and i may get burnt here but i'm going to hold against this disconcerting continual downward trajectory/sentiment.
https://www.marketwatch.com/press-release/jackson-announces-first-quarter-2022-results-2022-05-10?mod=mw_quote_news_seemore
I bought more of these around $28 after the divestment and felt smug when it was $40 plus. I made the worst mistake buying more at $38.5 just before the last results announcement so those are well down. Just have to tough it out as like you I think it is undervalued.
tom78; i am disproportionately invested here, not believing any rationale for the negativity/plummeting SP, so yes it's a dud for me at the moment too!, and can't believe as you say its near spin off price again.
It plummeted on not meeting analysts last quarter earnings - but the earnings were still astonishing. I can get my head round the figures - i just can't get my head round why the 'market' can't get it's head around the figures! My it's a rollercoaster, but despite now representing over 10% of my portfolio (i rarely go even near 5% per stock) i haven't sold a share as i believe there is deep deep value here - and at current SP, a potentially astonishing yield into the future.
Sorry to hear it's a dud for you currently.......i hope, and believe this will turn into a swan.
Nearly back to the spin off price now. Another dud for the portfolio!
This share always gyrates quite quickly/notably. It has since flotation; i wouldn't worry about the short term noise, or it's apparent lack of love; the numbers are there, and people shouldn't be concerned by the recent drop. US markets place a lot of importance on meeting/exceeding mkt expectations on earnings, and punish, often disproportionately, any miss, which is what they did here, disappointed that earnings were 'only' $3.94 for the quarter against an expected $4.85
The perspective for me here is they were marked down because the earnings weren't astronomical, only excellent - and $354 million for a quarter, or say £1.4 billion for the year, is hardly shabby/struggling. It is after all a third of its mkt cap.
I don't see the recent interest rates rise as an issue, only a positive, as it tends to drive demand for the security of their products.
Just because this seems unloved (10% shorted) doesn't mean there is some skeleton in the cupboard. Just as believing that this is undervalued as i do, when few others seem to, doesn't mean you/I am wrong. I'm not in the business of pumping holdings, but forget the noise, and hold; it will rise through the gyrations, and whilst i don't see the $60 aspirations ive seen, for anyone holding, there is good appreciation, and what i believe will become a 10% yield for those holding through 5 years from here....
I just don’t get it, either the market is wrong or all analysis saying this is cheap is b******s. Another fine mess i’ve gotten myself into and there have plenty in the last few weeks!
Wow, just bounced off $30, what a ridiculous overreaction!
Couple of weeks ago, when these were around $43, Motley Fool was recommending them, saying "ridiculously undervalued, with a price-to-earnings (P/E) ratio of around 1 and a price-to-book ratio of just 0.37"
What's two levels below ridiculously undervalued? Mentally deranged mispricing?
Horrid drop today on the earnings miss. Dropped some 20% over the last 5 days maybe news had already leaked on top of awful market conditions.
Dividend held at $0.55 weak pound is offsetting some dollar losses on this right now at least.
Yes, I've just doubled my stake, at $42.33, taki g my average, including the 2 divis (at $38 and $34.77) to $35.55.
With divis reinvested, I'm expecting these to double in 3-5 years, possibly even fewer.
Great results announced today and 10% increase in quarterly divvi to 55c; in 2 years time, holders of today will be reaping 10% yield, forget the growth; seemingly under the UK private investors radar, but very much on fund investors radar; a great number of well established US funds are in here, and building stakes. Yearly earnings nearly a 3rd of market cap, 20% of market cap in cash suggests not truly valued, despite being in a growing market supporting long term not short term fundamentals. A great 5 year hold, for both SP and yield appreciation.
Can't think why these are dribbling down as I think anything under $50 is a screaming "buy", especially with the 5.3% divi. So stuck myself down for a few more at $37.75, to go with the ones I bought in September at $26 and $30.50 (and "drip" in December at $38). Wish I'd stuck more of my Pru in here, and will use some of April's ISA sub to add here again if it's still at these levels.
Laura Prieskorn, CEO of Jackson, stated, "With a healthy balance sheet, continued robust annuity sales, and favorable investment returns, our second quarter results position Jackson well for success as an independent, public company. We intend to build on this momentum, pursue profitable growth and deliver on our financial target of $325 -$425 million in capital return to shareholders in our first year as a public company."
https://finance.yahoo.com/news/jackson-financial-announces-second-quarter-122000845.html
Third quarter results are due on November 9th (Tuesday)