Opinions
Peter Hodson
CI Financial Income Fund
CIX.UN-T
COMMENT
Aug 13, 2013
$15.430
Stock price when the opinion was issued
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PARTIAL BUY
An extremely well managed company but mutual fund companies are high beta stocks on the equity markets because they are a high margin product. Will be quite challenged on their earnings in the short term. Long-term it's a great company. Purchase by Bank of Nova Scotia (BNS-T) is very positive. If you believe markets are going to start coming back, it is not a bad time to start building a position.
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COMMENT
Investment management. High quality holding. One of the highest quality management teams in the business. Great environment and should be able to make some good acquisitions. Not a lot of upside, but thinks the market is forming a bottom. Longer-term, they are going to come out of this in a very good position.
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CI Financial (CIX.UN-T) or Sun Life (SLF-T)? This is a fairly tough one, because the insurance sector tends to do well if interest rates rise. Insurance sector, and Sun Life in particular, have had a big move this year as people have transitioned their portfolio just in case interest rates go up. CI has great leverage if equity markets continue to rise. They keep raising their dividend. Bank of Nova Scotia (BNS-T) keeps hovering over their shoulder to take them over and the stock is at a 10-12 year high. Thinks this company is more likely to do well because he thinks the equity markets are going to do well.