MetLife CEO Sells $19.3 Million in Shares, Keeping 760,000

MetLife chief executive Michel Khalaf sold 187,425 shares on Tuesday, November 10, at an average price of $102.97, for a total of $19,299,152.25. The disposal, disclosed in a filing with the Securities and Exchange Commission (the U.S. markets regulator), reduced his ownership by 19.80%. He still holds 759,013 shares, worth approximately $78,155,568.61. A nine-figure remainder takes some of the sting out of the signal.

The sale came six days after quarterly results that beat expectations on both lines. MetLife reported earnings per share of $2.78 on Wednesday, November 4, one cent above the $2.77 consensus. Revenue reached $20.52 billion against analyst estimates of $19.86 billion, up 18.2% year over year from the prior year's $2.34 EPS quarter.

What do the fundamentals show?

The insurer posted a return on equity (net income divided by shareholder equity) of 25.71% and a net margin of 6.21% for the quarter. Analysts expect 9.94 EPS for the current fiscal year, according to MarketBeat data cited in the report.

The stock traded down $1.07 at $101.87 on Thursday, on volume of 2,040,420 shares versus an average of 3,588,661. Its fifty-day moving average stands at $98.57 and its two-hundred-day average at $86.65. The twelve-month range runs from $67.33 to $106.72.

Valuation metrics, each explained once: a market capitalization of $64.02 billion, a price-to-earnings ratio of 13.28, a PEG ratio (P/E adjusted for growth) of 0.97 and a beta (volatility relative to the market) of 0.79. The current ratio sits at 0.21, the quick ratio at 0.20 and the debt-to-equity ratio at 0.65.

How is capital being returned?

The Board of Directors initiated a share repurchase program on Wednesday, August 5, permitting up to $3 billion in buybacks, or 4.8% of outstanding stock, through open market purchases. Buyback authorizations are conventionally read as a board's view that its shares are undervalued. The chief executive sold into that view.

A quarterly dividend of $0.5925 per share is payable on Tuesday, December 8, to stockholders of record on Tuesday, November 3. That annualizes to $2.37, a yield of 2.3%, with a payout ratio (dividends as a share of earnings) of 30.90%.

Where are institutions and analysts positioned?

Several large investors built positions in the second quarter:

• BlackRock Inc. purchased a new stake worth about $4,381,692,000.
• Pzena Investment Management LLC bought a new position of approximately $941,792,000.
• UBS Asset Management Americas increased its holding by 5.9%, adding 336,794 shares to reach 6,026,518 shares worth $509,904,000.
• Bank of America Corp DE opened a position of $455,424,000.
• Legal & General Group Plc bought a stake of roughly $326,904,000.

Institutional investors own 94.99% of the stock. The professionals bought; the chief executive trimmed.

Analyst activity has skewed constructive. Wells Fargo raised its price objective from $110.00 to $113.00 with an overweight rating on Thursday. Barclays lifted its target from $97.00 to $111.00, also overweight, on Wednesday, October 7. Argus moved from $93.00 to $109.00 with a buy rating on Wednesday, September 2. Evercore restated a mixed rating on Monday, August 24, and Weiss Ratings upgraded from buy (b) to buy (b+) on Monday.

Fourteen analysts rate the stock a Buy and one a Hold, producing a consensus of Moderate Buy with a $107.12 price target, per MarketBeat. MetLife, a global provider of insurance, employee benefits and retirement products across the United States, Latin America, Asia, Europe and the Middle East, now trades near the top of its twelve-month range. The chief executive picked a reasonable moment.