The financial sector has lagged the market considerably since the market perked up this fall. Since Sept. 1, the broader stock market is up about 12% even after recent declines, while the financial sector has tacked on about half that. The laggards do not just include massive banks like Citigroup (NYSE: C) and Bank of America (NYSE: BAC) — but also financial services companies including insurance companies and insurers.
Perhaps you’ve already trimmed some financial positions from your portfolio due to the recent weakness in the major banks — but don’t overlook some of the major insurance stocks that continue to suck wind like their retail banking brethren.
Here are six of my top offenders in the insurance industry, which you should cut from your portfolio ASAP if you own them:
Manulife Financial (MFC)
Manulife Financial (NYSE: MFC) is a financial services company that works with customers in 22 countries. Since January, MFC stock has dropped 19.7%, compared to gains of 7.5% and 7.3% for the S&P 500 and Dow Jones. Additionally, MFC has missed earnings estimates for the past two quarters and most recently reported a net profit margin of 19.9% in its last income statement. Currently trading at $14.73, MFC is trading well below its 52-week high of $20.79.
China Life Insurance (LFC)
In addition to life insurance, China Life Insurance (NYSE: LFC) also provides accident insurance and health insurance for its customers. Despite rebounding slightly since September, LFC stock is still down 7.3% year-to-date. LFC is currently priced at $67.98, after having hit a 52-week high of $81 earlier in the year. With a high price tag and uninspired performance on the year, LFC is an overweight stock that should be avoided.
Aviva (AV)
Aviva PLC (NYSE: AV) is focused on the long-term insurance and savings business, as well as fund management and general insurance. AV stock has been stagnant in 2010, down 0.7% year-to-date, compared to gains by the broader markets. Since last November, the insurance stock has dropped 4.8%. While Aviva has regained slightly since September, this stock should be avoided based on its yearlong performance.
Allstate (ALL)
Allstate (NYSE: ALL) is the holding company for Allstate Insurance Company, which is known for its wide range of insurance services. Since January, this stock is actually up slightly, at 0.5, thanks to a September rally. However, since the last week in October, ALL has slid nearly 8% to its current trading price of $30.18. Additionally, ALL missed its last earnings estimate by over 15%. While the stock looked like it was rebounding last month, it appears that Allstate should still be avoided.
Sun Life Financial (SLF)
Sun Life Financial (TSE: SLF) offers a diverse range of life and health insurance, along with investment management, retirement and pension products. Year-to-date, SLF stock has dropped nearly 5%, compared to gains by the broader markets. Also, analysts have downgraded their expectations of SLF’s earnings, projecting EPs of 65 cents a share after the company posted EPS 79 cents a share last quarter. SLF stock currently trades at $28.75 with a 52-week range of $23.58 to $33.46.
Hartford Financial Services (HIG)
Hartford Financial Services (NYSE: HIG) is an insurance and financial services company rounding out my list of top insurance stocks to sell. Since May, HIG stock has performed poorly, down 14.6%. As was the case with Sun Life, analysts are predicting EPS of just 88 cents a share despite a posted EPS of $1.43 last quarter. Trading at $24.40, HIG is far removed from its 52-week high of $30.46.
As of this writing, Louis Navellier did not own a position in any of the stocks named here.
