Industrial-Alliance Life Ins (IAG.TO)

(A Top Pick Jan 16/17, Down 0.98%) They have been growing and adding to their business. It is kind of in no man’s land here at present.

This is the fourth largest insurer. He thinks they have more than enough adequate capital to pass the required stress tests. It trades at 10 times earnings and has a good platform in life, health and employee insurance. Well-run company out of Quebec City. Yield 2.9%. (Analysts’ price target is $65.11 )

He believes we are in a rising interest rate environment and you want to own financials in this environment. It qualifies in valuation, price momentum and volatility. He likes MFC-T and it did well as a Top Pick. He likes all three.

Doesn’t own any of the insurance companies. They’ve done well in the last little while because of what has happened with interest rates. If we continue to see this kind of interest rate environment, they will continue to do well. You probably want to wait for a pullback before buying.

He likes the life insurance sector, and this company is part of that. Believes interest rates are going up and this company will probably benefit.

This is on the life insurance side as well as money management, mutual funds, etc. Lifecos are really challenged in operating in this low interest rate environment. This doesn’t meet his criteria.

They are doing a good job. It has broken above its 50 day moving average. The trend is in a non-aggressive down trend. It is near the top of its channel.

Industrial Alliance Group (IAG-T) or Intact Financial (IFC-T)? This is a fantastic company and really well-managed. CEO has done a tremendous job. The company understands risk management. He would not want to bet against this in the long run. It is hard to choose between these 2. They are both long-term holds and they both know how to manage risks.

It sold off well below its long term multiple. It is much cheaper than the rest of the space. The management team is continually growing book value.

Has been more beat up in the market compared to Sun Life Financial (SLF-T) and Manulife (MFC-T), because it has less exposure to outside of Canada, although they do have a bit of US business. Also, their asset management business is seeing a little bit of negative flow. This has brought the stock price down to a level where he is comfortable buying it. Growing Book Value at about 10% a year for over a decade now. Expects to see acquisitions in US insurance and on the asset management side. Dividend yield of 2.76%.

Similar to Manulife (MFC-T) or Sun Life (SLF-T) but much smaller. This is a space where you would benefit from buying the larger, higher-quality names at this time. You could buy this one in the later stages of recovery once the other 2 have started to become more expensive. Valuation is still quite cheap on the big names, and that is where he would start.

Has SLF and MFC. This one is less levered than SLF. A third of its revenues come from wealth management side. Revenue all from Canada. A more conservative name.

Prefers Intact Financial (IFC-T) which he feels is the strongest in this space. Insurance business primarily works on 2 things, a good stock market and interest rates that are inclined to rise. Has really good support at $42. Another couple of dollars lower and it would be a Buy.

Chart is showing a breakdown and is not looking good. Wasn’t unusual to see it dropping today, but there wasn’t a tremendous amount of volume. If it can’t hold at $42, he could see it easily going down to about $39. He would be positive if it broke above $45. It has to reverse and start an uptrend.

This looks like it had the most exposure and upside to the environment where rates were going up. Have made a few acquisitions. Reasonably valued.