IGM Financial Inc. (IGM.TO)

Buy BAM instead? Nice up-channel, but faces resistance. Neutral for him. Yes, sell IGM and buy BAM.

Have long been the highest cost provider but he does not know if that is still the case today. They have a lot more headwinds than tailwinds.

Banging its head against his EBV +3 level. Closed at $43.48, and he has a model price of $49.17, a 36% upside. However, the regulatory environment in Canada is really, really tough, and he doesn't see it changing anytime soon.

As an established Canadian company, this has one of the higher dividends, close to 6%. This has been under pressure from the move away from commission based products to EFT’s, etc. The company is now positioned and the stock has been washed out. Being in one of the great bull markets of history, it is going to help all stocks, and this company is going to do just fine.

It has issues. Its underlying mutual funds are generally high fees. It is more vulnerable to a sell off because the shares are expensive, 17 times PE. The mutual fund space is being hit with lower fees.

This has been a tremendous growth story over the years. Has some concerns about conventional mutual fund managers as a whole, including this company. Financial services, specifically mutual funds and asset management is a mature industry that is not growing at 2, 3, 5 or 6X GDP growth rates any more. It is becoming more fee competitive. There are costly and disruptive regulatory forces on the horizon. To the extent that management fees will be phased out over time by regulatory action, it is going to prompt a lot of disruption.

If you are coming into this as a new investment, he would prefer Power Financial (PWF-T) because you have investors group as well as Great West Life (GWO-T). While not as exciting, it would be a good hedge in that it would stand to benefit from a rising interest rate environment. However, IGM is at a low right now, so doesn’t think you will be hurt by continuing to own it.

Shares could suffer when the new regulations come into place on July 15. They will force brokers and mutual funds to fully disclose all embedded fees within the clients’ statements. Thinks there will be more passive investing.

It is a steady eddie. It is a good long term play. He would not own it right now. There is uncertainty with regulatory changes coming to the industry so he would not buy it right now.

Money has been coming out of equity mutual funds. Ironically this one has been doing very well relative to the industry over the last year. A tough business and could become even tougher on July 1 when CMR2 comes out, the new mandate of the OSC, where fees are going to be disclosed. Valuation is cheap, but there are too many headwinds. He would prefer Fiera Capital Corp (FSZ-T) which focuses on the institutional and US markets.

First preferred 5.9% noncumulative 1^st preferred series B? Wouldn’t classify this as a secure fixed income security, so it should be a very small portion of your fixed income portion. Wouldn’t be a buyer of the stock, but might consider this “preferred” as a Hold.

We have an improving stock market and people generally under-own equities. If he wanted exposure to companies that benefit if the market recovers, then he would want to look at investment management companies, and this company fits that bill. This has a lot of exposure to Canada and Canadian investors, so it will benefit. He would prefer something that will benefit more from the US market. You should do fine with this as it will rally with the market, but he would prefer Blackrock (BLK-N), a big manager of ETF’s. ETF’s are growing like wildfire. They will also benefit from management fees they get paid managing these ETF’s. Dividend yield of 6.4%.