Primerica Shares Surge

It has been quite a while since an IPO garnered such attention, but Primerica [PRI:NYSE] shares lived up to its hype, at least for the first day. By mid-day trading, the stock was trading above $20, reaching as high as $20.20, more than $5 above its $15 initial offering price with 15 million shares trading hands. The company is a spin-off from Citigroup [C:NYSE] who raised $320 million from the sale. Many believed that the IPO would sell well because the shares were undervalued at $12-14. According to Reuters, the company is trading at 0.7 times book value, when most insurers trade near 1.0 times. This would mean the company's shares fair value compared to its peers is $20. Primerica has a unique marketing and employment strategy that has been controversial, which has prompted lawsuits against the company. Despite this, the company has over 100,000 employees across North America working as independent agents.