Insurance Stock’s Bullish Charge Should Continue

by Sam Collins | November 25, 2013 1:04 am

Hartford Financial Services Group (HIG[1]) –This is one of the leading U.S. multi-line insurance companies and a leading writer of property and casualty insurance. I last recommended the stock on May 30[2], at just over $30. Since then, the company has had success in improving its balance sheet and realigning its distribution, and therefore, its growth prospects have improved.

Standard & Poor’s has a “five-star strong buy” rating on the stock and increased its earnings forecast for 2013 to $3.56 per share from $3.20, and it expects $3.80 in 2014. Its 12-month target is $42.

Technically, HIG completed a high-volume breakout from a cup-and-handle pattern with an impressive breakaway gap on Jan. 2. Since then, the stock has advanced for all of 2013 on a series of bullish chart patterns, including flags and an inverse head-and-shoulders. 

It is now trading in a new bull channel that began with the break from the inverse head-and-shoulders. The trading target is $42, but long-term investors could achieve much higher returns. HIG has an annual dividend yield of 1.7%. 

HIG Chart
Click to Enlarge

Chart Key[3]

  1. HIG:
  2. on May 30:
  3. [Image]:

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