Sell Jackson Financial (JXN)

December 28, 2023

Current Price: $51.83

Recommended Price: $24.70

Total Return: 130.8% **

**Including dividends

Summary

I’m closing out my Jackson Financial (JXN) recommendation and will be selling the stock. Since the time of my recommendation in September 2021, the stock has generated a 130.8% return including dividends.

While I still like the JXN today, it’s hard for me to get too excited about it given that it operates in the volatile variable annuity market. For the past couple of years, JXN has returned ~$500MM through share buybacks and dividends. It currently has a market cap of $4.1BN. As such, it’s trading at ~8.0x its distributable earnings. This seems like a cheap valuation but not overly compelling given the “black box” risk. Finally, I have some realized taxable losses, and I will use gains from JXN to offset them.

Where could I be wrong?

Jackson management is in discussions with regulators to unlock latent / redundant capital. If these discussions result in a windfall of excess capital that can be distributed to capital, the stock could move meaningfully higher.

At the same time, I have no unique insight into this situation. I’m going to take the win and look to deploy the proceeds into a new compelling idea (stay tuned!).

Disclosure/Disclaimer:

Rich Howe owns shares of JXN. All expressions of opinion are subject to change without notice. All published emails/articles/correspondence is provided for informational purposes. We do not warrant the completeness or accuracy of this content. Please do your own due diligence and consult with an investment adviser before buying or selling any stock mentioned on www.stockspinoffinvesting.com.