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A new era has begun and Stock of the Week: HIG

A new era would start this week with Obama becoming 44th President of USA. It is indeed an historic moment in our lives and for a moment we should forget about all the economic troubles around us and celebrate this moment. I hope we can cherish this historic moment for rest of our lives !
Now coming to stock of week:
Company: Hartford Financial Services (HIG)
Target buy-price: $12 to $14
Target price in 12 months: $18 to $21 (for 50% return)
Background:
  • Provides all kinds of insurance and asset management
  • 200 year old company in 2010
  • Revenues: above $20B Profit of about $4.7 per share with P/E of less than 4
  • Market cap: approx $4B
  • It still issues dividend of about $.32 per Q yielding about 10%
  • Recent catalysts: approval as bank holding company opening door for becoming eligible for TARP funds, coverage in Barron's on 1/17/09, positive surprise on earnings pre-announcement
  • Completed more than $2B capital raise from Europe in last 6 months providing a solid cushion against further deterioration in financials

Despite being in financial sector, this company provides an excellent reward to risk.

Have a good weekend !

/Shyam

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