Welcome back! This will be the first of three Earnings Reports articles that I release in short succession. The bulk of my portfolio reported 1Q2021 results on May 5 and 6, so I have been swamped with (mostly good) data. These articles are usually behind the paywall, but this one is available for free. You really don’t want to miss the next two though, because there are some absolutely WILD numbers in there. To make sure they go to your inbox, subscribe or use my 30 day free trial below. Thanks for your support! As always, this is not investment advice.
ANAT
First up is American National (ANAT), which actually reported its earnings on May 3. I totally missed this report when it came out, so I am covering it here. My last price target on ANAT was $230 per share. For 1Q2021, ANAT reported earnings of $6.33 per share. I could not find any analyst expectations for ANAT’s EPS, but the stock has absolutely ripped upward since the report. I will count that as a beat.
More importantly, however, ANAT posted a huge increase in shareholder equity. Its book value per share is now over $240, as shown in Figure 1.
The dividend was solid as well. Correspondingly, my intrinsic value for ANAT is now $265. As far as price targets, I am hoping that ANAT will eventually reach its IV. However, Figure 3 shows ANAT’s price-to-book ratio. It has historically been at around 0.75, and it was only greater than 1 around the 2008 financial crisis. I am not optimistic that ANAT will actually reach its IV. I think I would be happy cashing in my win if it hit a P/B of 0.75, which would be a price of $180 per share.
FDP
The first stock that actually reported on May 5 that we will go over is Fresh Del Monte Produce (FDP). FDP absolutely smashed its earnings report, and the market rewarded it by raising the stock price by more than 10%. Just about everything was great in the report. There is not that much else to say here other than its shareholder equity rose by about 3%, leading to a corresponding IV increase of about 3%. My IV is now $38 (up from $37), and the P/B plot shown in Figure 3 has me hoping that historical valuations could return and push the share price much higher.
TPC
Next up is Tutor Perini (TPC), which I have talked about a lot. My previous IV for TPC was $35 per share going into this report. TPC reported an EPS of $0.31, which was a beat, but revenue was down sharply. Accordingly, the market was not pleased with this report, and TPC was nearly down 6% at one point today. I am, of course, not so concerned about a revenue miss. Figure 4 shows that the shareholder equity was in line with the long-term trend. Nothing else in the report struck me as out of place. My calculated IV for TPC is still $35 per share.
UNM
Unum Group (UNM) is next. My old price target for UNM was $60 per share. UNM beat, but its shareholder equity was down on the quarter. My guess is that this decrease was just a fluctuation, as it was solidly up year-over-year, but this is the second decrease in a row. Everything else in the report looks normal, so since the book value per share went down by about $2, my IV has decreased to $58.
AEL
Our final May 5 reporter is American Equity (AEL). My previous intrinsic value for AEL was $75 per share. AEL actually disappointed in its EPS, reporting $0.43 when $0.59 was expected, but reported $962.2 million revenue on $484.3 million expected. The market reaction to this was initially very negative, but the stock is now flat on the week. My biggest takeaway from this report is that the shareholder equity for AEL, plotted in Figure 5, is very unstable right now.
The recent down fluctuation means my calculated IV has fallen to something like $67. I am totally fine with this swing, because I think AEL still has not priced in its huge spikes in shareholder equity from 2019-2020. The current P/B is around 0.5, and I fully expect this to hit 1.0 at some point.
That’s all for May 5 earnings reports! I will be back soon with part 1 of the May 6 reports. If you enjoyed this article, you should subscribe or use the 30 day free trial to get the May 6 editions! See you again soon!