Time to Load Up on MetLife? (MET, PRU)

With the recent market sell off, shares of MetLife Inc. MET have once again drifted lower and are now trading below its estimated book value. Currently, MET is trading at $37.39, up 0.51% on the session, though lower by 21.7% from its recent high of $47.75. With a book value of $41.00, Street estimates for next year of $5.32, and a yearly growth rate of over 17% this stock appears to be severely undervalued. Its current P/E ratio is 8.82x and its forward P/E is 7.04x, which is cheaper than the company’s nearest rival, Prudential Financial PRU, with a current multiple of 9.45x, a forward multiple of 8.25x, and a growth rate of only 13.47%. Throw in the fact that Barron’s recently reported that the company could “easily” hit $7.00 per share of earnings in just five years and you have a strong case for getting long the name. On a technical basis, MetLife is trading near the $35.00 support level, which it has found buyers at several times over the past twelve months. In relation to the stock’s double-bottom set and confirmed back in March 2009, the stock has currently retraced 38.2% from its recent high, which is a key Fibonacci retracement level. The $30.00 level represents a 50% retracement. MetLife is set to report earnings on July 29th. As the earnings date approaches, traders should look for a high volume sell off to get long the name; traders could do this by buying half a position in the stock and selling puts (and thus, volatility) on the name to accumulate the other half of this position. This would allow the trader to take down the nearly 2.00% yield on the name as well. MetLife, Inc. is a provider of insurance, employee benefits and financial services, with operations throughout the United States and the regions of Latin America, Asia Pacific and Europe, Middle East and India. The company provides a variety of insurance and financial services products, including life, dental, disability and long-term care insurance, various annuity products, and auto and home insurance. Within the United States, it also provides a range of savings and mortgage banking products.