With half of 2012 in the record books, it's important to take a look at whether the stocks that interest you can live up to their full potential. By making sure you know about a company's future plans and possible challenges, you can make a better decision about whether it's a smart investment for your portfolio.
Today, let's take a look at Hartford Financial (NYSE: HIG ) . As we saw in our look at Hartford Financial last month, the retailer has rebounded somewhat despite still not being consistently profitable. But Hartford Financial has a chance to take advantage of a competitor's blunder. Will it do so? Let's take a quick look at Hartford Financial's prospects for the rest of the year and beyond.
Stats on Hartford Financial
|Average Stock Price Target||$25.54|
|2012 EPS Estimate||$3.64|
|2013 EPS Estimate||$3.63|
|2012 Sales Growth Estimate||16.7%|
|2013 Sales Growth Estimate||(10.3%)|
|CAPS Rating (out of 5)||***|
Source: Yahoo Finance.
How will Hartford Financial do the rest of the year?
Like many insurance companies, Hartford had a subpar 2011. But so far this year, the insurance company at least hasn't had quite as bad a loss experience. For the second quarter, Hartford expects catastrophe losses of $280 million-$300 million, down from $447 million in 2011's second quarter. That's consistent with what fellow insurer Cincinnati Financial (Nasdaq: CINF ) announced yesterday, as fewer bad storms hit the nation this year.
Still, the same low interest rate environment that has led Genworth Financial (NYSE: GNW ) , MetLife (NYSE: MET ) , and Prudential (NYSE: PRU ) to take some dramatic steps to avoid losses in unprofitable lines of business shows no signs of abating anytime soon. Like its peers, Hartford can take action to try to offset its lower-than-expected investment returns, but it eventually needs to figure out how to make its portfolio pay off.
To make its way back, Hartford needs to see some favorable trends continue. Stronger pricing in the first quarter helped boost profits, and holding onto those gains could help Hartford's stock bounce back. Moreover, if Hartford can market its insurance products in light of the huge disasters that millions of Americans have suffered in recent years, then it could be an underwriting positive, making the most of the company's losses last year.
Analysts may not be optimistic about Hartford's prospects. The company definitely won't improve on its own, but with some strategic vision, it could benefit greatly from the current conditions in the industry.
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