In 1987, every institution wanted to have portfolio insurance. In 2015, portfolio insurance has become a short chapter in investing history, but insurance can be a great business -- good enough for the likes of Warren Buffett -- and worthy for your individual portfolio, perhaps.
The insurance industry comes in many shapes and forms today -- life, health, property, automobile, home, commercial, re-insurance and more.
We scanned the charts to find a few names worthy of further fundamental inspection.
The first chart of Travelers Cos. (TRV) is the long-term picture with a very nice stair-step advance from the late 2008 low. When you look back at the 2008-09 market low, it is interesting to see which stocks showed early leadership and bottomed in late 2008 and which stocks bottomed in March 2009 or later. TRV bottomed early and showed the way!
The second chart of TRV shows an April-June 2015 correction and subsequent rally back towards the March 2015 high. TRV has briefly retested the June low in market swoon and has held -- a good technical sign.
Chart 3 is Chubb (CB), a long-term picture. A retest of the 2008 price low takes place in the first quarter of 2009 and then CB is off to a beautiful uptrend. Every dip is a buying opportunity.
In the fourth chart, we can see CB has a huge upside gap on heavy volume after ACE Limited (ACE) agreed to buy Chubb for $28.3 billion, a 30% premium valuing the company at $124.13 a share. Prices are making a high-level consolidation in the $125-$115 area ever since.
Everest Re (RE) is our last pick. Chart five is the longer term view. With RE, the picture is positive but a little different. After the final low from the 2008 bear market, RE made a nice base in 2010 and 2011 which set the stage for the subsequent advance.
Our last chart, is the more recent price action of RE. Here we can see RE making a downward price correction and retesting support from the late 2014 and early 2015 period. Once this retest is over and we see some fresh accumulation (usually seen by increased volume on days that RE closes higher), RE is likely to resume its bull move.
--By Bruce Kamich and Sebastian Silva