Share Price Catalysts, page-2

I'll start with a look Genworth's operating cashflows over the past 12 years (as far back as I could go). I believe that operating cashflow is a better long-term proxy for underlying profitability than reported profit as it disregards the multitude of subjective adjustments.

As we see below, operating cashflow has oscillated with macroeconomic conditions, peaking in 2021 at $345m and bottoming at $59m in 2017. It has averaged $196m over the period. It generated free cashflow in 2010 and 2011 (impacted by the GFC) and through more recent housing market downturns, including the mining downturn. It has generated tremendous profits and been consistently profitable.



Given this history of strong profitability, I've always been perplexed by the fact Genworth trades at a discount to NTA, which essentially places no value on future policies written, despite a long record of strong profitability and its position as a market leader in a niche oligopoly.