To veteran technical analyst Andy Addison, the stock market has turned treacherous for the near term. "The market's important technical indicators have deteriorated substantially," he warns. His "overbought/oversold indicator," for one, registered a sell signal recently.
But for all his bearishness, the editor and publisher of The Addison Report newsletter is high on one stock: Liberty, a holding company that owns Liberty Life Insurance as well as Cosmos Broadcasting, which operates seven television stations located mainly in the South. Liberty's stock has been hitting new highs, at 33 3/4 a share, up from 24 in mid-November, and Addison believes the stock is on its way to the 40s.
It just may reach that level pretty fast. Whispers are that Liberty President and CEO W. Hayne Hipp, whose family controls 47% of the company's outstanding shares, plans to sell the Cosmos Broadcasting subsidiary, estimated by some analysts to be worth $15.50 per Liberty share. Hipp denies that the Cosmos stake is for sale. Still, investors are paying only $18 a share for the life insurance operations, or seven times estimated 1993 earnings.
Veteran insurance analyst Myron Picoult at Oppenheimer & Co., who is also high on Liberty, figures the company will earn $2.55 a share this year and $2.95 in 1994, vs. 1992's $2.25. Says Picoult: "Our enthusiasm is buttressed by the belief that life insurance equities could be in for a period of upward revaluation, especially for companies like Liberty that have exceptional regional recognition."