Aflac Reaffirms Guidance

I’ve mentioned before that one of the great overlooked aspects of investing is when a company reaffirms its guidance. Most people shrug it off and think “big deal, no news.”
But I like to see companies, especially ones I like, tell the investing public how they’re doing even if it’s simply to reaffirm previous guidance.
Barron’s reports:

Aflac management reaffirmed a forecast for $5.24 to $5.56 in earnings per share this year, Briefing.com reports, in line with Street estimates of $5.42, but said that range could shrink a bit at current exchange rates.
Aflac also said its exposure to sovereign debt of the PIIGS — Portugal, Italy, Ireland, Greece and Spain — is $4.2 billion, which is higher than the $1.8 billion that Bloomberg reported as the company’s exposure back on April 28.
Under current exchange rates, the company’s forecast range of $5.24 to $5.56 would narrow to $5.29 to $5.43, the company said.
Within its sovereign risk exposure, the firm holds $286 million of Greek debt, and another $1 billion in exposure to Greek financial institutions.

This is another good example of why I favor high-quality stocks. I can’t be sure of what’s in AFL’s portfolio so I need to place some trust in senior management. I never completely trust any company, but I have a much higher degree of faith in Aflac than I do most other stocks.

The stock is now down to $44 a share which is absurdly low based on their earnings guidance (around eight times earnings).

Posted by Eddy Elfenbein on May 19th, 2010 at 10:29 am

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