Not all SPAC plays are created equal. A possible example of this is Abacus Life, Inc. (NASDAQ: ABL) which completed its business combination with East Resources Acquisition Company (NASDAQ: ERES) on June 3. As things stand, ERES’ is set to commence trading with its new ticker – ABL – on June 5, and given the bullish sentiment surrounding the deal, ABL stock could be one of the insurance stocks to watch closely this week. As the company is already profitable, ABL could be one of the most promising insurance stocks.
ABL Fundamentals
ABL is set to debut on July 5 following its SPAC merger with ERES. The ticker change is likely to trigger a cascade of buys as there is a lot of excitement surrounding the deal. That said ABL is small, yet notable among insurance stocks.
Currently, ABL boasts two noteworthy features: the first is its profitability, and the second is its micro float of 2.8 million. Both of these features could assist the stock in running after the initial stock reaction to the ticker change. With that in mind, 85% of ABL’s shares are under a 24-month lock-up period which ensures that insiders will not sell their shares once the deal is closed.
While the stock has the potential to soar in the short term following the ticker change, ABL has impressive long-term potential. One of ABL’s strongest features is its profitability with the company a leading figure in purchasing life insurance policies – boasting a 20% market share in the US. In this way, ABL accumulated $2.9 billion from its purchased policies.
This is compounded by the fact that ABL boasts a return on tangible equity rate of 32% which is higher than insurance industry leaders like The Progressive Corporation (NYSE: PGR) and Chubb Limited (NYSE: CB) which have rates of 20% and 22% respectively.
Additionally, ABL’s net income margin far outclasses other alternative asset managers. For example, StepStone Group Inc. (NASDAQ: STEP) has a net income margin of 27% and GCM Grosvenor Inc. (NASDAQ: GCMG) has a net income margin of 26%. That said, ABL’s net income margin is 59% which is closer to Blue Owl Capital Inc.’s (NYSE: OWL) 54%.
When it comes to ABL’s valuation, there is a likelihood that it may be undervalued based on its price-to-earnings ratio. Currently, ABL’s P/E ratio rests at 17x which is much lower than its peers STEP and OWL whose P/E ratios are 22.1x and 21.1x respectively, while slightly higher than that of GCMG which has a P/E ratio of 16x. Based on this, ABL could be one of the undervalued insurance stocks once it starts trading with its new ticker on July 5.
Technical Analysis
ABL stock is currently in a neutral trend and is trading in a sideways channel. Looking at the indicators, the stock is currently above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, the RSI is neutral at 56 and the MACD recently had a bullish crossover.
As for the fundamentals, the company’s ticker change is a major catalyst since it signals ABL’s debut in the stock market. Given the bullish sentiment surrounding ABL, it could be one of the insurance stocks to keep an eye on this week as it could soar.
ABL Forecast
Since SPAC plays could be extremely popular among investors, ABL stock could be one of the insurance stocks to watch closely this week as it could run following the ticker change. With this in mind, ABL could have such a run due to its extremely low float which allows it to run quicker. Considering that ABL is already profitable and with a P/E ratio much lower than other alternative asset managers, the stock could be one of the promising insurance stocks to invest in.
ABL Fundamentals
ABL is set to debut on July 5 following its SPAC merger with ERES. The ticker change is likely to trigger a cascade of buys as there is a lot of excitement surrounding the deal. That said ABL is small, yet notable among insurance stocks.
Currently, ABL boasts two noteworthy features: the first is its profitability, and the second is its micro float of 2.8 million. Both of these features could assist the stock in running after the initial stock reaction to the ticker change. With that in mind, 85% of ABL’s shares are under a 24-month lock-up period which ensures that insiders will not sell their shares once the deal is closed.
While the stock has the potential to soar in the short term following the ticker change, ABL has impressive long-term potential. One of ABL’s strongest features is its profitability with the company a leading figure in purchasing life insurance policies – boasting a 20% market share in the US. In this way, ABL accumulated $2.9 billion from its purchased policies.
This is compounded by the fact that ABL boasts a return on tangible equity rate of 32% which is higher than insurance industry leaders like The Progressive Corporation (NYSE: PGR) and Chubb Limited (NYSE: CB) which have rates of 20% and 22% respectively.
Additionally, ABL’s net income margin far outclasses other alternative asset managers. For example, StepStone Group Inc. (NASDAQ: STEP) has a net income margin of 27% and GCM Grosvenor Inc. (NASDAQ: GCMG) has a net income margin of 26%. That said, ABL’s net income margin is 59% which is closer to Blue Owl Capital Inc.’s (NYSE: OWL) 54%.
When it comes to ABL’s valuation, there is a likelihood that it may be undervalued based on its price-to-earnings ratio. Currently, ABL’s P/E ratio rests at 17x which is much lower than its peers STEP and OWL whose P/E ratios are 22.1x and 21.1x respectively, while slightly higher than that of GCMG which has a P/E ratio of 16x. Based on this, ABL could be one of the undervalued insurance stocks once it starts trading with its new ticker on July 5.
Technical Analysis
ABL stock is currently in a neutral trend and is trading in a sideways channel. Looking at the indicators, the stock is currently above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, the RSI is neutral at 56 and the MACD recently had a bullish crossover.
As for the fundamentals, the company’s ticker change is a major catalyst since it signals ABL’s debut in the stock market. Given the bullish sentiment surrounding ABL, it could be one of the insurance stocks to keep an eye on this week as it could soar.
ABL Forecast
Since SPAC plays could be extremely popular among investors, ABL stock could be one of the insurance stocks to watch closely this week as it could run following the ticker change. With this in mind, ABL could have such a run due to its extremely low float which allows it to run quicker. Considering that ABL is already profitable and with a P/E ratio much lower than other alternative asset managers, the stock could be one of the promising insurance stocks to invest in.