Investec Asset Management's Chris Freund says the Old Mutual (JSE:OML) counter is trading at a crazy price. The stock hit a new low on Thursday, falling in tandem with other UK-listed insurers. Freund says he walked away from Wednesday's results presentation "with a lot of comfort". He was speaking on the Moneyweb Market Commentator podcast. "There are lots of stories floating around about Old Mutual's capital position and their liquidity position being insufficient," he notes. Freund says the market was expecting a deep-discounted rights issue, which didn't materialise. "I think the market is over-reacting," he says. "There are a lot of issues in the group, there's no doubt about it, there's a lot of work they need to do to clean up, the US Life operation obviously, but I think the share is trading at unbelievable value." Freund says the share is "conservatively valued somewhere around R13 or R14". "The share price has got so low that [2009] earnings are essentially irrelevant. It's just: 'is Old Mutual going to survive or not?' And if your answer is 'Yes', for whatever reason, then the share price is a wrong price, by a multiple of at least 100%." Another financial services company, Standard Bank (JSE:SBK), released results on Thursday. The dividend was held, and the price rose nearly 4%. "Standard Bank is a class act and they have been for a long time," says Freund. He says the earnings, which were flat, were conservatively stated. He suggests that if Standard Bank had taken a less conservative approach, it could have reported earnings growth of 4-6%. "And that's not really the case for the other banking groups." For more insights from Chris Freund read the transcript. Write to Julius Cobbett:
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