CNO Financial Group Inc. (CNO - Analyst Report) had spent $16.2 million to buy back 2.2 million shares in the second quarter of 2011. The shares repurchased were made under the repurchase program announced on May 16, 2011. The buyback equals approximately 0.9% of the total outstanding shares as of March 31, 2011.
In May, the board of directors of CNO Financial approved a share repurchase program authorizing the company to buy back shares worth $100 million.
Concurrently, the company also made a principal prepayment of $16.2 million, same as that of the share repurchase, as required under the terms of the Senior Secured Credit Agreement. The prepayment will thus lower the amount to be paid on September 30, 2016. Also, the outstanding balance was lowered to $308.8 million. It was $325 million as on March 31, 2011.
The share buyback as well as prepayment further validates the company’s strong financial position.
CNO Financial posted a strong first quarter on the heels of strong top-line growth in all the business segments and improved capital ratios.
The Zacks Consensus Estimate for second-quarter 2011 is 18 cents per share. For full years 2011 and 2012, the Zacks Consensus Estimates are, respectively, 72 cents and 80 cents per share.
We maintain our long-term Neutral recommendation on CNO Financial Group. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.
Headquartered in Carmel, Indiana, CNO Financial Group Inc. through its subsidiaries engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products throughout the United States. It competes with Torchmark Corp. (TMK - Analyst Report) and Unum Group (UNM - Analyst Report).