5. Genworth Financial Inc. (NYSE:GNW)
Share Price as of October 16: $7.14
Number of Hedge Fund Holders: 38
Genworth Financial Inc. (NYSE:GNW) provides life insurance, long-term care insurance, mortgage insurance, and annuities. It provides products and services to individuals and families, helping them protect their financial future.
The company reported a net income of $76 million, and adjusted operating income of $125 million in Q2 2024. Enact had a strong quarter with an adjusted operating income of $165 million to Genworth Financial Inc. (NYSE:GNW), receiving $63 million from Enact in the second quarter. The LTC segment reported an adjusted operating loss of $29 million, while life and annuities reported an adjusted operating loss of $1 million.
Genworth Financial Inc. (NYSE:GNW) reported an outstanding quarter under the multi-year rate action plan, achieving a total of $138 million of gross incremental premiums approved, with an average percentage premium increase of 47%. It continued to scale its CareScout Quality Network in the second quarter, extending its availability to 40+ states as of July 30. It has already achieved ~70% coverage of the age 65-plus census population in the US and now expects to achieve between 80% to 85% coverage by the end of the year.
Its LTC policyholders have quickly adopted CareScout. It has helped hundreds find quality care, saving $1-1.5 billion on LTC claims. It’s seeking approval from the Compact to expand its product reach. The company’s strategic focus on growing its CareScout business and expanding its legacy LTC insurance portfolio positions it well for long-term profitability and shareholder value creation.
Here is what Ravensource Fund has to say about Genworth Financial, Inc. (NYSE:GNW) in its Q4 2021 investor letter:
“Genworth is a U.S. publicly listed (NYSE:GNW) insurance company that covers mortgage, life and long-term care needs. In 2021, the market price of our Genworth common shares increased from $3.78 to $4.05, growing the value of your Ravensource investment by 0.4%.
Much like Quad, Genworth had a transformative year. And much like Quad essentially none of its achievements were reflected in its share price. In 2021, Genworth sold its stake in its Australian mortgage insurance unit and successfully completed a partial IPO of its crown jewel U.S. mortgage insurer, both key milestones for our thesis. These non-core asset sales enabled Genworth to reduce its debt by ~$1bn / 50% in 2021, with over $3bn of total debt reduction since our initial investment. Genworth has gone from a company whose senior debt was trading at 10% yields, to a strong healthy company intending to return capital to shareholders in 2022 — the first time it will have done so since 2008. This is a critical final-stage step to Genworth rebuilding its market credibility and investor base, and will help bridge the gap between the current price and our conservative value of $5.00, representing a 23.5% potential return.”
