), a diversified insurer that also manages mutual funds, with assets of $12 billion. "The stock has the best technical credentials in its sector," says Andrew Addison of Addison Investment Management. Hancock has been hitting new highs almost every month.
What's driving it up? Two things: Hancock is a leading candidate to replace American General, which is being acquired by Prudential, in the Standard & Poor's 500-stock index. This means that more institutions may have to buy the stock. And there's takeover talk. Addison thinks Hancock is ripe for a buyout by the likes of FleetBoston Financial. One thing FleetBoston lacks is an insurance arm. "FleetBoston and Hancock have good synergies, and a merger would make strategic sense," he says.
Hancock's stock has outperformed both its peer group and the market. Still, the stock remains cheap, notes Addison, trading at 13 times estimated 2001 earnings of $2.65 a share, and 12 times 2002's estimated $2.95. Vanessa Wilson of Deutsche Banc Alex. Brown says Hancock's "valuable brand name and established financial service franchise" should be worth 55 to 60 in 18 to 24 months. She sees Hancock beating the S&P 500 and other insurers over the next 12 months. By Gene G. Marcial