This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Primerica Starts Strong for Citigroup

The stock has slumped since that announcement, losing 6% through Wednesday's close at $4.05. The Treasury's cost basis for its stake is $3.25 per share, so it was sitting on a paper profit of around $6.2 billion for its 7.7 billion shares when the yesterday's closing bell sounded. Citigroup shares were up 1.5% to $4.12 in recent trades.

Primerica sells term life insurance, variable annuities and various mutual fund products to middle-income consumers. It relies heavily on leads generated by new sales recruits, and says it has more than 100,000 licensed representatives. The model prompted skepticism from Morningstar analyst Jim Ryan, who recommended avoiding the IPO.

" E ven though the company has recruited north of 200,000 bodies over the each of the past five years, the number of licensed insurance and mutual fund representatives has remained flat at about 125,000 per year, indicating an extremely high fallout rate," Ryan says in commentary on Morningstar's Web site. "The average sales representative sells only two and a half new policies per year, a paltry amount by any measure, and we think marketing through independent representatives cedes all control of the customer to salespeople who can easily switch to another company."

Investors appear to choosing for today at least to look past this criticism, as well as some regulatory concerns raised by the company in its official filings, to concentrate on its earnings.

According to its S-1, Primerica posted net income of $494.6 million on revenue of $2.22 billion in 2009, up from a profit of $167.7 million on slightly lower revenue in 2008. The higher profit resulted from the absence of charges recording in 2008 related to goodwill impairment of certain assets that declined in value due to the financial crisis.

-- Written by Michael Baron in New York.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
C $54.15 -0.04%
PRI $46.04 -0.90%
AAPL $126.83 -1.50%
FB $78.08 -0.93%
GOOG $533.21 -1.40%

Markets

DOW 18,026.26 -44.14 -0.24%
S&P 500 2,107.59 -6.90 -0.33%
NASDAQ 4,975.1010 -41.8280 -0.83%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs