Lincoln National Corporation (LNC): The Vilas Fund Thinks it is Undervalued

The Vilas Fund returned 34.3% in the first quarter of 2019, as per its recently released Investor Letter (download here). Aside from reporting about its performance in the letter, The Vilas Fund also shared its views on some of the stocks from its portfolio, among which is Lincoln National Corporation (NYSE:LNC).

“Lincoln National (LNC)

Lincoln National is one of the top 5 or 6 life insurance companies in the United States. They also have a significant presence in fixed and variable annuities. The stock is currently trading at 6.9 times this year’s earnings estimates at 6 times 2020. With a strong dividend, opportunistic share repurchases, a low teens return on equity and accelerating growth, partially due to the fact that retirees currently prefer safe returns that are lower than higher returns with equity market volatility, Lincoln National is a fantastic bargain that should produce high teens returns for owners from today’s price.”

Lincoln National Corporation (LNC): The Vilas Fund Thinks it is Undervalued


Lincoln National Corporation is a Fortune 250 holding company that operates via its subsidiary companies covering insurance and investment businesses. It has a market cap of $12.80 billion. YTD, the company’s stock gained 26.82%, having a closing price of $65.35 on May 10th. Lincoln National Corporation is trading at a price-to-earnings ratio of 9.03.

At Q4’s end, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, same as in the previous quarter. Below, you can check out the change in hedge fund sentiment towards LNC over the last 14 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

The largest stake in Lincoln National Corporation (NYSE:LNC) was held by Arrowstreet Capital, which reported holding $86.9 million worth of stock at the end of September. It was followed by AQR Capital Management with a $79.9 million position. Other investors bullish on the company included East Side Capital (RR Partners), GLG Partners, and Millennium Management.


Disclosure: None.

This article is originally published at Insider Monkey.