Travelers Companies Inc (TRV) — This is one of the largest property casualty insurance companies in North America, providing insurance products and services for individuals, businesses and government.
On Jan. 21, Travelers posted better-than-expected Q4 earnings. While earnings of $2.90 per share represented a 6% drop from a year ago, they beat the Zacks consensus estimate of $2.71. The earnings decline was attributed in part to net investment income falling 18% in the quarter due to lower fixed and fixed income returns.
Following the announcement, S&P Capital IQ Equity Research lowered its price target on TRV stock by $5 to $120, but its analysts maintained their “Buy” rating. They view the stock as undervalued, noting the company has a strong balance sheet, as well as “top-notch risk management and underwriting prowess.”
In November, TRV stock reversed down from the top of its broad bull channel at $115. Last week, shares appeared to stabilize at the support line of the bull channel at $102 and are now attacking resistance at the 200-day moving average at about $105.
The bull channel support line connects with lows made in August and October of 2014. Prices within the channel fluctuate around the 200-day moving average. The internal MACD indicator is close to issuing a buy signal.
Buy TRV stock at $104 for a trade to the top of its range at $115 within six months for a potential gain of more than 10%, plus dividends. The company pays a quarterly dividend of 61 cents, for a current annual yield of 2.3%, and is expected to go ex-dividend in early March.