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Wednesday, April 15, 2009

Caution Genworth Financial [GNW] Clients

Posted April 15, 2009: Bob Brinker's "Land of Critical Mass" Marketimer and Moneytalk website explains his affiliation with Genworth Financial Inc [LINK]:

"Bob Brinker has partnered with Genworth Financial Asset Management to offer a personalized and professional money management service. Dollar cost averaging strategies are also available for those investors who want to minimize entry point risk. The account minimum size is $100,000. A financial agreement exists with GFAM for services, including referrals. Please refer to Schedule H for details."

Genworth Financial Inc. failed to qualify for new capital [TARP money] from the U.S. Treasury.

The following is a direct quote from the GFAM website [LINK] Please note that it doesn't mention Brinker's latest "call to add new money" at "low-to-mid 800's.":

"Genworth Financial Asset Management, Inc. (GFAM), through its exclusive relationship with Bob Brinker, provides the framework to help clients achieve their financial goals. GFAM implements Bob’s tactical asset allocation recommendations by selecting mutual funds for client accounts. You may be aware of Bob's recommendation in January 2000, to move 60% from equities to cash, and in March 2003, to become 100% invested in the equity portion of your portfolio. Additionally, during the past three years, Bob has made several less publicized, yet equally astute, calls to add new money to portfolios at the 1100, 1160, 1180, and, more recently, 1250 levels on the S&P 500 index"

GNW is a penny stock:

Reuter's news:

* Analysts question Genworth's business model

* Shares slide as much as 30.5 percent (Recasts first two paragraphs)

By Jonathan Stempel

NEW YORK, April 13 (Reuters) - Genworth Financial Inc (GNW) shares tumbled on Monday after the money-losing life and mortgage insurer failed to qualify for new capital from the U.S. Treasury, prompting questions about the company's business model.

In afternoon trading, the shares were down 58 cents, or 21.1 percent, at $2.17 on the New York Stock Exchange, after earlier falling as much as 30.5 percent to $1.91.

Genworth, once part of General Electric Co, is one of several insurers that sought to buy banks or savings and loans last year to win holding company status as lenders and qualify for taxpayer funds under the $700 billion Troubled Asset Relief Program. Insurers have seen capital squeezed as the value of their investments has fallen.

After markets closed on Thursday, Richmond, Virginia-based Genworth abandoned its TARP request, saying the Office of Thrift Supervision had failed to approve its application to become a savings and loan holding company.

Genworth had planned to buy Interbank fsb, a Maple Grove, Minnesota, lender, to be eligible for TARP money.

"I don't believe Genworth has a viable business model in the current market environment," said Alan Rambaldini, an equity analyst at Morningstar Inc in Chicago. "The question is whether Genworth can muddle through the next couple of years until the economy turns around. That's the only thing that can save them."

Neither Genworth nor the OTS would comment on why the company's application was allowed to expire. Last week, the Treasury Department said some insurers would be eligible for TARP money...

[Read full article LINK]
Read Kirk Lindstrom's comments here: [LINK]

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