Question:
I own shares of Brown and Brown and Cognizant Technology Solutions. I’ve held Brown since early 2012. I bought Cognizant earlier this year at $76. What’s your outlook for these?
Answer:
Brown & Brown, Inc. (NYSE: BRO) is an insurance broker in a fragmented industry. There are a lot of small players with room for growth. This company would be a good way to play the insurance industry. It has a low beta, indicating it is less volatile than the market. It has a solid history of making acquisitions and leveraging them. The company is also not plagued with the broader issue of a low rated bond portfolio. The company is financially strong and meets our criteria. If you hold Brown & Brown, we recommend holding it. If you do not own it, it is worth consideration.
Cognizant Technology Solutions Corp. (NASDAQ: CTSH) is a technology solutions outsourcer. The company manages the full life cycle of e-business and application development for companies. The company’s PEG ratio is below 1, meaning its growth is higher than its current value. The company is financially sound, and has $9 per share in cash on its books.
Question:
I’m looking at some small banks, and wanted to get your review on Synovus Financial Corp. and First Horizon National.
Answer:
Synovus Financial Corp. (NYSE: SNV) came close to going to the “upper room.” The bank accepted TARP money and is still in the process of paying it back. This process will likely dilute the current shareholders. They have already done so once in an effort to raise capital. We believe this stock is one to avoid. It is still a speculation at $3.21. The bank is also repositioning its balance sheet. The company will likely survive. Once there is more leeway in buyouts, this company should be an attractive target, as it has some valuable real estate in its operations.
First Horizon is the holding company behind First Tennessee bank. The company has seen its loan growth shrink. It too is under pressure to raise more capital. The banking industry is one to be wary of right now. We suggest that you underweight banking in your portfolio. One small bank worth consideration is BB&T Corp. (NYSE: BBT). It has a very diversified businesses for a small company.
Question:
I have an investment in AFLAC. It went thru a bit of a downturn in spring 2012. I’ve always liked the company, so I bought more at that time. Overall what do you think of this holding?
Answer:
Aflac Inc. (NYSE: AFL) is the largest underwriter of supplemental insurance in the world. It is the largest provider of cancer insurance in Japan. The company pays a 2% dividend. We find Aflac to be very well run. The stock has a PEG ratio of 0.7, which means it is trading less than its earnings plus dividends. We recommend holding this stock if you own it. If you do not own it, we recommend buying.
At Henssler Financial we believe you should Live Ready, which includes understanding the fundamentals behind your investments. If you have questions regarding your securities, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
