HX Trader Position Update

A few weeks ago we recommended buying shares of insurance company ,.

The company was facing some controversy as they were under investigation for some issues at one of their divisions. This hit the stock and we saw an opportunity.

Looking at the nature and scope of the allegations, we felt that they were material but unlikely to have a greater impact on the company.

These types of situations are impossible to ever know for sure but we have seen dozens of them across our twenty-five years of trading. The vast majority of them - despite being unpleasant and having an impact - play out with no real ongoing impact on the company.

Based on this experience, we recommended the shares.

This morning a short-selling research firm released additional allegations about the company. We have read the report and our assessment (again, based on our experience) is that they bring up valid points but, ones that ultimately will not impair the company.

Despite our assessment, however, we are sticking with our “stop loss” methodology and recommending readers close out the position.

When dealing with financial services companies there are particular risk regarding leverage and this further supports our decision to close the position.

We recommend selling shares of Globe Life, Inc. (NYSE: GL).