Globe Life fights back against short-sellers' accusations
- Short-sellers have alleged that Globe Life's subsidiary, AIL, is facing business issues including agency closures and disconnected phone lines.
- JPMorgan analyst Jimmy S. Bhullar found these allegations to be largely inaccurate and misleading based on his investigation.
- Despite the challenges, Bhullar remains optimistic about Globe Life's future and its stock performance.
In recent days, Globe Life Inc., a prominent life insurance company, has been targeted by short-sellers who have accused the company of agency closures and unverified business practices associated with its subsidiary, American Income Life (AIL). These allegations suggest that AIL is facing federal actions which the short-sellers claim has resulted in numerous disconnected phone lines and shuttered offices. However, following an investigation, JPMorgan analyst Jimmy S. Bhullar found that the claims lack credibility and are filled with inaccuracies. Most reported disconnected lines have either been routed to voicemail or remain active, and some offices previously cited as closed are still operational with AIL agents present. According to Bhullar, only one office, previously mentioned as closed, was misrepresented and has continued to provide service. In addition to debunking the claims about disconnected phone lines, Globe Life clarified that any indication of vacant offices is due to a shift toward remote work rather than signs of financial distress. The company has actually increased its agent count in recent years, which counters the implications made in the short-seller report. Furthermore, Globe Life refuted accusations regarding predatory cold-calling practices and alleged mismanagement related to stock buybacks, asserting that their repurchases have added value and were executed during favorable market conditions. Despite the backdrop of regulatory inquiries and significant short-selling activity, Bhullar has maintained an Overweight rating on Globe Life's stock with a price target of $136 by year-end 2025. He believes the company's fundamentals remain strong and that they have resilience against the ongoing challenges faced by the industry. Bhullar also considers a resolution to the inquiries as a potential catalyst for recovery, making Globe Life an appealing investment. Overall, short-sellers seem to be targeting Globe Life without substantial evidence, as they seem to misunderstand the company's operational adjustments and the reasons behind recent changes in their business structure. With a solid franchise, improved projections on earnings, and no evident signs of distress, analysts believe Globe Life has a positive trajectory moving forward.