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Fly News Breaks for January 24, 2017
GNW
Jan 24, 2017 | 09:29 EDT
BTIG analyst Mark Palmer finds it "exceedingly difficult" to play Genworth Financial shares from the long or the short side. The upside for the shares, assuming no other bidder emerges, is capped at $5.43, or the price offered by China Oceanwide, Palmer tells investors in a research note. The analyst's sum-of-the-parts analysis yields a $4.23 per share price for Genworth, which he notes assumes the intrinsic value of the subsidiaries being fully unlocked, which he says is "far from a given." Palmer believes the value of Genworth shares is within 15%, plus or minus, from current levels. Investors concerned about mark-to-market risk, however, "need to get comfortable with the notion that the stock could trade in pennies in the immediate aftermath of an announcement that the China Oceanwide deal had been nixed," Palmer cautions. He keeps a Neutral rating on the shares. The stock closed yesterday at $3.77.
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