Investing

Tax Plan Could Put These 5 Insurers In Buy Zone: Investing Action Plan

Here’s your Investing Action Plan for Friday: what you need to know as an investor for the coming day.

[ibd-display-video id=2323711 width=50 float=left autostart=true]Hurricanes Harvey, Irma and Maria initially sank property and casualty insurance stocks but as the long recovery and rebuilding process starts, the estimates of losses have been lower than feared, helping shares rally back. On top of that, the GOP’s tax reform proposal, if enacted, would give some insurers a big earnings boost.

Stocks To Watch

Shares of Travelers ( TRV ), a component of the Dow Jones industrial average, edged up 0.2% to 122.90, working their way through a flat base with a 130.47 buy point. The stock tumbled nearly 13% from Aug. 16 to Sept. 7 but is now just 5% off its prior high.

Progressive ( PGR ) rose 0.6% to 47.98, nearing a flat-base buy point of 49.11. The stock was down 11% at its low, but has nearly clawed back all that ground.

Allstate ( ALL ) edged up 0.5% to 91.33 and is also in a flat base with a 95.35 entry and is bouncing back from a 10% drop.

Hartford Financial Services Group ( HIG ) dipped 0.15% to 54.96 but remains above its 50-day average and near a 57.26 buy point from a cup base.

Chubb ( CB ) added 0.25% to 142.27 on its way to a 147.12 buy point but is in a V-shaped cup-with-handle base. The irregular shape suggests volatility and investor uncertainty, while stocks should ideally have smoother patterns.

On Wednesday, Chubb estimated insured losses for Harvey at $650 million pretax and for Irma at $800 million-$950 million pretax.

Also Wednesday, Barclays analysts said insurers paying a high effective tax rate that are mostly exposed to the U.S. would likely benefit most from the GOP’s tax proposal, which would lower the corporate rate to 20% from 35%.

Allstate, Progressive, Hartford, Traveler and Brown & Brown (BRO) have the potential to benefit the most from the plan, according to Barclays.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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