Quick Win By The Algorithm: GNW Back On Track
Quick Win by the Algorithm
Genworth Financial (GNW)
On August 22, 2016, the I Know First algorithm had published a forecast for the time period of 3 days. In addition, on August 22, 2016, one was published for the 7 day period, as shown below. In accordance with the algorithm’s prediction, Genworth has risen 12.05% over the past 3 days, and 26.67% in the past 7 days.
Genworth Financial, Inc. (GNW) provides insurance and homeownership solutions in the United States and internationally. It operates through five segments: U.S. Mortgage Insurance, Canada Mortgage Insurance, Australia Mortgage Insurance, U.S. Life Insurance, and Runoff.
The reasoning for Genworth’s exceptional returns over the past week is as a result of the firm finally rebounding after making strategic moves to reposition itself as high-performance firm once more. GNW has been climbing over the past month as they had once again topped earnings estimated for the second quarter in a row. They had reported Q2 2016 earnings per share of $0.25, beating the consensus estimate of $0.2 per share, by 19%. The outperformance can largely be attributed to the stellar performance in the U.S. Mortgage Insurance Business, as the housing market has again seen a climb in demand with a low supply being reported.
Prior to Q1 2016, GNW has been reported net losses, however, now for the second straight quarter they have reported not only positive earnings but with a positive cash balance sheet worth $78.2 billion. This can be largely attributed to Genworth CEO Tom McInerney, who had instituted cost reductions measures by about $150 million, achieved by Q2, and finished the sale of their European Mortgage Insurance block. They as well repurchased two other blocks of life insurance companies, known as BLAIC.
Overall, there is much upside for the firm, as they have begun proven to investors to be able to once again generate positive earnings; as well as many analysts increasing their ratings on the firm as well, with earnings estimates constantly being revised in a positive direction.
