Manulife Financial (MFC.TO)

(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.

It is relatively out of favour but capital markets and interest rates are good. It is a growth story with a lot of negatives already priced in. (Analysts’ target: $29.21).

(A Top Pick Oct 5/17, Down 3%) He expected we would have a rebound in interest rates and they would affect this one positively. MFC-T was getting out of its US operations and moving internationally. It went sideways. All the values are still very much there. He would stick with it.

Fundamentals are wonderful, great dividend. But stock hasn’t done much for last 2 years. Lot of trading at $24. Wouldn’t touch it, unless for the dividend. It’s liabilities are concerning. Strong support at $23.40, get out if goes below $23. Can’t call a trend until hits $25. The good story is irrelevant if the stock is not performing.

No one can explain why the shares have such a trough time appreciating. They have shifted into more wealth management. He suggests you buy another name in the space that does go up. He prefers the Canadian banks.

They announced a new focus on disclosure on their legacy portfolio and improving their efficiency ratios and becoming a leader in digital adoption. He believes this will help narrow the valuation gap. This is heap. They model a growth of 11% on earnings. (Analysts’ price target is $29.44)

He is wondering why it is where it is. SLF-T is on more of a tare than MFC-T. It has a bit to do with the mix of business. He thinks it is worth $30. Sometimes these things happen in the market. He owns it because the market is not efficient. You have to have patience.

He's disappointed because it's stalled out, because all Canadian financials have, including the banks which haven't reached new highs since January. But he thinks they will all do better. Hold for now and sell on the highs in the next rally.

It's been lagging its peers, largely because of new management since last fall. New management is putting more pressure of their troubled legacy businesses, namely long-term care in the U.S. They've been expanding aggressively in Asia. More importantly, they're looking at their cost-structure. They're aiming for an efficiency ratio under 50% by 2022, and currently at 55%. This means several billions in cost savings. Alaos, capital will be released from dispositions in the next few years. New management is modernizing this company. There could be some short-term pain, including write-offs, but current prices amount to exceptional value. (Analysts' price target: $29.46)