Manulife Financial (MFC.TO)

He likes trading sideways stocks, as long as you know the downside potential. He recently bought MFC off the mid-$20's bounce, and he believes it could teach the mid-high-$20's. Not a huge trade, but pays a good dividend. It could reach that peak in the winter. And it's not a high-risk play. (3.7% dividend, Analysts' price target: $30.03)

He owned it going into the financial crisis and bailed out because it was overleveraged to markets and was unhedged. After it was hurt by this, it overreacted and is now so well hedged that it cannot benefit from rising interest rates. He likes the life insurance industry and owns three companies in that space, but not this one. Among Canadian insurers, he prefers Sun Life. He thinks it is better managed, with better exposure to interest rates. He likes the international diversification of both Manulife and Sun Life, but Manulife’s biggest international diversification is via John Hancock in the US, which is troubled.

The insurance sector is trading at historical low multiples, but there is risk to rising interest rates in their annuity business. The PE is near 9 – good value. There is some Asian exposure. It should continue to be a staple in your portfolio. Yield 3.7%.

All of the insurers are trading of forward PE is 8-9 times. This is the favoured one of the group because of the Asian exposure. The problem has been the US business. Any of the variable annuity businesses are challenged. He believes in their ability to continue to deliver.

This is one of the few Canadian companies he owns. He likes it. He likes the potential of the business, and the leverage to higher rates. The stock rose in expectation of higher rates and dropped off when the main increases were postponed. The company struggled with its US business, but now the company is stronger, the dividend is fine and will gradually increase. Eventually the Asian expansion will pay off and the stock will probably move to the low $30’s, which is where many people have set a target price. He would nibble away at it at this price. He would buy a lot more at $20 and would sell some at $32.

What's the effect of interest rates rising is a good thing for insurance companies? Good, because higher rates boost the bottom line quickly. Also, the hedging costs decrease.

From a technical level, fell below the 200-day average earlier this year and has stayed there. Pretty good dividend, which should grow. He owns Sun Life, which has a more diversified base. You don’t want to buy insurers simply for interest rate movements, because they may not happen.

MFC-T vs. BNS-T. He would say buy them both. BNS-T is building up their wealth management business after building Latin American banking. MFC-T has lagged quite a bit including lagging SLF-T. MFC-T has bounced around. They continue to grow outside of Canada and rising rates benefit them.

(A Top Pick October 23, 2017. Down 6%) All insurers are suffering from the yield curve (the low difference between short-term and long-term rates). The worst is over for the entire sector. Manulife should have 10% earnings growth over the next 10 years even with the current environment. He likes the insurance sector generally and he likes the US and Asian exposure of Manulife.

A frustrating stock, stuck in a range for so long. It gets toppy near $30. He doesn't see $30 coming though he'd sell it then. It plateaus in the high-$20's. Just hold onto it .

He holds in his income platform because of the dividend. He trades it in his equity platform but will continue to hold in his income platform. Yield = 3.6% (Analysts’ price target is $30.03)

A primary holding for him. He really likes it. They've exceeded analyst expectations over several quarters, but the new CEO is dealing with long-term care and John Hancock, legacy businesses in the U.S. Meanwhile, Asia its business is rapidly growing. It's been in the woodshed for a while, but in time, investors will recognize its value. It is very competitively priced now.

This has lagged behind the banks. It has had gains in efficiency. So can maintain and grow dividend. Likes the wealth business in Asia. Thinks there will be good growth over the short to medium term. There has been solid improvements in fundamentals. Yield 3.6% (Analysts’ price target is $30.03)

It is rare when you can buy a quality company at less than 10 times earnings and 1.4 times book value with dividend and earnings growth. They will benefit from interest rate increases. It should be near $28-$29 in a year from now. Yield 3.6%. (Analysts’ price target is $30.03)

It trades slightly over book value and is cheap. There have been several write downs in the long term care assets they hold in the US. They will continue to hold it. As this a very liquid stock there may be some short-sellers. He continues to like the fundamentals going forward.