It's not impossible

We are not suggesting that it is impossible to find,  but we think it will take you a while.  What we are referring to is the fact that Aflac has grown same-quarter-year Operating Earnings every quarter,  without even one exception, for at least 15 years.  What we mean is Q2-2005 grew over Q2-2004,  Q4-2010 grew over Q4-2009, etc.

Here's a quarter, call someone who cares

That's the old country song that I think of whenever someone mentions Jim Cramer's opinion on anything.  On the lightning round on June 12, when asked about Aflac, he said "I'm not that interested".   I guess he was not interested in making 21% since then.   Booyah !

Print version

Video version - I can't imagine anybody actually wanting to see it

Some Selected Data

From This Source

The Big Picture as of Sept 8, 2012

Stay with Cramer !

Let's review and update our post below dated June 15 titled "Jim Cramer's Calls On The Duck".   We think you might see why, as both a long term holder and trader of AFL, we are frightened when he recommends it and delighted when he gives it a Sell ranking.

Since his Sell ranking on the Boo-Yah Gong Show on June 12 the stock has gained about 14.95% into the close today versus 6.65% for the SPY in the same time period.

Avoid Taxation,  Stay With Cramer  !

Chart Courtesy of Think or Swim from TD Ameritrade

I'm not saying that you can't find other companies with this consistent Operating Earnings record, but I would suggest that you are probably going to have to look a little while to find them.

Mission Accomplished

Trading The Duck With HACOLT

HACOLT is explained in the July 2012 issue of Technical Analysis of Stocks & Commodities magazine.  The code is provided for about 12 software packages.  The signals are few and are generated from the weekly chart.
On the long side there were six buys and sells.  Two buys were made at a lower price than the previous sell for 27.76 points to the good.  Four buys were made at a price higher than the previous sell for a loss of 10.92 points.  Net at the end of the period was 16.84 points to the good.

The above data is for trading from the long side only.

Jim Cramer's Calls On The Duck

 Courtesy of Wall St. Cheat Sheet

On April 26 Jim Cramer ranked Aflac a Buy.  When we saw this we made a post you can see here titled "An Unfortunate Event, IMO".  The reason we considered his Buy ranking "An Unfortunate Event" is because we are long The Duck.  It closed that day at 45.02.  It started a decline almost immediately that took it down to close at 38.45 on June 4,  for a loss of 14.5%.  After a brief rally to close at 40.64 on June 12 he has now changed his ranking to Sell.

Let's track Cramer.  From his Buy to his Sell the stock fell 9.7% on a closing basis, with actual drawdown on the long trade of 14.5%.  That's a loss.  So far since his Sell the stock is up 2.4% and it has only been 2 days.

As soon as I saw that Cramer had changed his ranking from Buy to Sell I called my brother and the first words out of my  mouth were "I have great news, Cramer just gave The Duck a Sell ranking."   The reason we find this great news is because we are long The Duck.

Duck Analysis From Morningstar

Aflac Looks Cheap, But Exposure To Europe Raises Concerns

Notice how the stock turned back down after rallying up to the downtrend line.  See post below on April 28.

Data from Finance.Yahoo.com

We love this guy's enthusiasm, but we think that he might be a bit misleading about the share repurchase

Just one person's opinion

We share his opinion on the valuation of  "The Duck"

An Unfortunate Event, IMO

Q1-2012 Conference Call Transcript

Yearly Operating Earnings Per Share

Just The Facts

An All-Time Record Quarter

Per Share Operating Earnings have grown every year in Q1 for at least 15 years.

Best Quarterly Net Earnings EVER !

An all-time record quarter was just reported

Best Quarterly Operating Earnings Per Share EVER !

 

Aflac has grown Per Share Operating Earnings in every same quarter year over year since at least 1998. Clarification: We are comparing Q1-2006 with Q1-2005, Q3-2010 with Q3-2009, etc.

Aflac Announces First Quarter Results, Raises Aflac Japan Sales Outlook, Declares Second Quarter Cash Dividend

Courtesy of MarketWatch.com

Aflac said it entered into agreements to swap into Japanese yen the $750 million in dollar-denominated senior notes that the Columbus, Ga.-based insurer issued Feb. 10. The agreements cover $400 million of 5-year fixed-rate notes as well as $350 million of 10-year fixed-rate notes. The swap arrangement “significantly lowers the effective interest rate on the senior notes ... and provides future flexibility with our capital position,” said President and Chief Financial Officer Kriss Cloninger in a statement.

Links

Link to Trade with Pete - Jan 31

Link to Aflac Named Top Dividend Stock With Insider Buying - Feb 1

Link to Q4 2011 Earnings Call Transcript, compliments of Morningstar - Feb 1

Following the UBS Analyst

When you see a Gain above it is how the stock has performed since the SELL rating from UBS. In other words, the Gain / Loss is a result of fading the UBS call, not going with them on it. One has to wonder how they explain this to their clients, how they got them out right before a 12%+ run in 14 trading days. But not to worry. If their clients shifted that money to 10 year treasuries they might get this 12% in . . . . . . . oh, maybe 6 years. Oh, wait, I forgot. The dividend yield on the stock is greater than the yield on 10 year treasuries, so their clients may not ever catch up.

Minyanville

We think that they are a little late to the game, but it seems that they are finally coming around. Link to Minyanville

Two Weeks To Go

There are about two weeks to go until Q4 and full year 2011 earnings are released. It's a good time to review.

1. When Q3 earnings were released CEO Dan Amos said he was expecting full year 2011 Operating Earnings to be between $6.30 and $6.37 per diluted share.

2. Since then, on December 16, Bloomberg reported him as saying that sales in Japan are running way ahead of target.

3. The cash dividend was raised last year, the 29th consecutive year of raises. The payout ratio is about 30%, leaving adequate room for share repurchases and more dividend raises going forward.

If full year Operating Earnings come in at $6.30 per diluted share we are looking at a stock tonight that is selling ( 45.18 ) for 7.2 times trailing 12 months Operating Earnings. You can decide for yourself if the greater risk is to the upside, or to the downside?

An Opinion On The UBS Downgrade

Here's the link to the full article

Perhaps The Guys At UBS Didn't Get The Memo ?

Repost from December 18

Why We Don't Care

It amazes us how these guys can be paid the enormous sums of money that they are paid to be so wrong. The UBS calls that you see above were taken from finance.yahoo.com

Their recent track record with the Duck is less than impressive

We just increased our Duck count at 9:45, paid 43.70, right on top of the Symmetrical Triangle.

Daily Chart At The End Of 2011

Bad News Sells

Bad news always sells. If you don't believe it just walk into a bookstore today. After the tsunami on March 11, 2011 the naysayers started coming out of the woodworks, especially on message boards, saying that the sales and revenue in Japan would take a hit. CEO Daniel Amos basicly said that the tsunami would be a near non-event (financially) for the company. In fact I believe that I heard him one time say that sales would likely increase following the tsunami. Of course he was proven to be correct, as shown by the Japan Sales Results above.

Aflac is not your Daddy's Enron. On March 16 of this year Aflac issued a press release, saying that Aflac was declared a World's Most Ethical Company for a fifth consecutive year. The Ethisphere Institute, a think tank dedicated to the creation, advancement and sharing of best practices in business ethics, corporate social responsibility, anti-corruption and sustainability, annually recognizes companies around the world that demonstrate a commitment to ethical leadership, compliance practices and corporate social responsibility. Aflac is the only insurance company to appear on the list each year since the inception of the award.

Some Highlights From Q3-2011 Earnings Release

The board of directors declared the fourth quarter cash dividend. The fourth quarter dividend of $.33 per share is payable on December 1, 2011, to shareholders of record at the close of business on November 16, 2011. This represents a 10.0% increase in the quarterly cash dividend effective with the fourth quarter payment. This also increases the cash dividend for the 29th consecutive year.

Some excerpts from comments by Chairman and Chief Executive Officer Daniel P. Amos:

“With three quarters of the year complete, we continue to believe we are positioned for another year of solid financial performance. Throughout the year, both Aflac Japan and Aflac U.S. have continued to do a very good job managing our operations, including expense control. As we have stated previously, our expectation was to increase spending in the last half of the year, particularly on marketing and IT initiatives in the fourth quarter. Despite our expectation for higher spending in the fourth quarter, I am confident we will achieve our 2011 objective of growing operating earnings per diluted share at 8%, excluding the impact of the yen. If the yen averages 75 to 80 to the dollar for the last three months of the year, we would expect reported operating earnings for the fourth quarter to be in the range of $1.45 to $1.52 per diluted share. Under that exchange rate assumption, we would expect full year operating earnings of $6.30 to $6.37 per diluted share."

“Looking ahead, I want to reiterate our expectation that 2012 operating earnings per diluted share will increase 2% to 5% on a currency neutral basis. Furthermore, once the effects of our proactive investment derisking program and low interest rates have been integrated into our financial results, we believe the rate of earnings growth in future years should improve.”

We Know What The Problem Is

We just don't know when it might end. At the end of Q2 - 2011 the company had the following comments in their earnings release concerning their investments:

As a result of the company’s proactive investment derisking program, Aflac has significantly reduced peripheral Eurozone, perpetual, and financial exposures on an amortized cost basis. At the start of 2008, sovereign and financial investments in peripheral Eurozone countries made up 5.9% of the total investments and cash, declining to 2.8% by the end of the second quarter of 2011. At the start of 2008, investments in perpetual securities made up 14.7% of total investments and cash, declining to 8.0% by the end of the second quarter of 2011. At the start of 2008, investments in financial securities made up 41.9% of the total portfolio and declined to 30.1% by the end of the second quarter of 2011. As a result of the proactive investment derisking program, the company has no direct investment exposure to Greece, only senior indebtedness in Ireland, and materially lower exposure to Portuguese investments.

In the outlook following Q2 - 2011 Chairman and CEO Daniel P. Amos had the following to say:

“Like the first quarter, realized investment losses reflected the significant progress we’ve made with our proactive investment derisking program. I am pleased with where we are with that initiative and believe the extensive sales and impairments of riskier investments are largely behind us. However, we will continue to closely monitor Aflac’s consolidated $93 billion portfolio."