Hartford's Quick Turnaround: Is It Safe?

HARTFORD, Conn. (TheStreet) -- Hartford Financial Group(HIG Quote) has been through a lot in the past year.

Just over three months ago, the insurer's stock was languishing at $11, representing a price-to-book value of less than 47%. Hartford's stock tumbled 25% in June, helping to raise its beta -- a measure of volatility -- to 2.23. (A correlation with the overall market is 1.) It had an analysts' consensus price target of $17, according to SNL Financial. The shares stood at $26 yesterday. So is Hartford out of the woods?

The turn appears to have started with the raising of capital. Hartford said in June it would take $3.4 billion in TARP funding and issue additional common stock. As a result, its stock dropped more than 4%. That's not unlike what happened at Lincoln Financial Group(LNC Quote), the other insurer that took TARP money.

But there was a surprising improvement to income in the second quarter. After three consecutive quarters with losses totaling $4.6 billion, Hartford almost broke even with a $15 million loss.

Hartford sold 56 million common shares in August, raising an additional $900 million. On that day, the stock closed at $17.80. Seven days later, it was up to $19.65.

With today's price around $26, amounting to 78% of book value, it appears the worst is behind Hartford. But volatility is even higher.

A lot rides on third-quarter results, due to be released Nov. 3. New Chief Executive Officer Liam McGee started work last Thursday. Fresh from Bank of America(BAC Quote) and without any baggage attached to the insurance industry, Hartford is ready for a new start.