5 Struggling IPOs To Buy For The Long-Term

2. Corebridge Financial, Inc. (NYSE:CRBG)

Number of Hedge Fund Shareholders: 22

IPO Price: $21.00

Current Price (as of June 9): $16.89

Stuart J. Zimmer’s Zimmer Partners owns the largest of the 22 long positions in Corebridge Financial, Inc. (NYSE:CRBG) held on March 31 by the select group of hedge funds tracked by Insider Monkey’s hedge fund database. Several other funds own more than 2 million shares of CRBG, including Harris Associates, Ken Griffin’s Citadel Investment, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Corebridge Financial, Inc. (NYSE:CRBG), which was spun off from American International Group, Inc. (NYSE:AIG) last year, has over $365 billion in assets related to the retirement and insurance fields. AIG remains the firm’s largest shareholder and is beginning to unwind some of that overhang, recently pricing a secondary offering of 65 million shares at $16.25 per share.

Biased though it surely is, AIG also has a $68 price target on the stock. Bank of America on the other hand also has a ‘Buy’ rating on CRBG shares, but with a $26 price target.

The Oakmark Equity and Income Fund discussed some of the positives it sees in Corebridge Financial, Inc. (NYSE:CRBG) in the fund’s Q1 2023 investor letter:

“We added two new positions, Corebridge Financial, Inc. (NYSE:CRBG) and Wendy’s, in the quarter. Corebridge is a life and retirement company that was partially spun off from American International Group (AIG) through an initial public offering last fall. Corebridge has extensive, long-standing relationships with many of the largest financial institutions to sell various retirement products. It is also one of the largest retirement service providers to the education market through VALIC Financial Advisors. It also operates a high performing, seasoned life insurance business. The market is valuing the company like it is just a variable annuity provider despite its much more diversified and stable earnings stream. Part of the discount is due to the lack of liquidity and an overhang from AIG’s 77% ownership, which will eventually be brought to market. Trading at five times our estimate of normalized distributable cash flow, the stock is highly attractive to us, and we are willing to wait for the ownership overhang to resolve itself.”