Manulife Financial (MFC.TO)

It is in the top quarter in its ranking. The latest earnings estimates have gone up a little, but sales have gone down. They have excellent dividend coverage and yield and it may do well over 3-5 years.

We had an important technical breakout recently and confirms the trend is on the upside, then it came back to the previous trading range. Typically stocks like this do well as you get close to the end of the year. Hang tough for a while and wait to buy more until the middle of October.

He likes the company because higher interest rates help them. They have good growth potential in Asia. He thinks it will take them a while to sell US assets.

(Top Pick June 9/16, Up 38.47%) It has done well because the market and interest rates went up. They are still growing well in Asia. He is still happy with it.

He owns others instead. It comes down to quality of management and an ill-timed acquisition of John Hancock. It continues to underperform and they may now spin it out or sell it. It continues not to be a good performer. They have hedged away a lot of the benefit they will get from rising bond prices.

Not his favourite company. It is difficult to project what their next quarterly earnings are going to be. His big concern is where their growth is coming from. He isn’t a positive investor in the far east. Prefers Sun Life (SLF-T) because it is mainly North American/Europe.

He prefers this to SLF-T. He likes the franchise they are building in Asia, but that is a 10 year outlook. It sold off on news after a good quarter. There’s profit taking going on today. There seems to be no near term catalyst on the disposition of the Hancock division.

This has recently moved into a multi-year high. Technically, the trend is up, and the stock is outperforming the TSE Composite. Momentum indicators are also very positive. On a seasonal basis, this has reached a peak around late July. It is not unusual for stock after a nice run to reach a peak some time right around this time of year. You may want to take some money off the table. For a longer-term perspective, you could stick with the stock, with the idea of buying some more during its next period of seasonal strength, the middle to the end of October.

It is struggling to go higher. When interest rates go up it is even better for lifecos than the banks. It is a perfect storm for these when rates go up and markets go up. The financial industry is getting lower margins now, however. They are not making a lot in John Hancock and are looking to sell it. They want to push it in to Asia and make a go of it there. It is into a bad time, but you have to pick the right one. He prefers Great West Life (GWO-T).

His main concern about this is their focus in the Far East, particularly China. He doesn’t trust some of the foreign regimes to stay out of the business. If you are into those areas, you have added a political risk. This company has perked up recently. It’s not a bad company, but the exposure in the Far East has added an element of risk that he is not willing to accept.

(A Top Pick Aug 24/16. Up 48.26%.) Good management. New CEO has a lot of Asian experience. There has been recent speculation that the company may sell off some of the less performing assets that they’ve had in the US.

It was fairly unloved for some time and he took a position. He bought it looking for a rising rate environment. He started seeing technical indicators showing a resistance level about where it is now. He decided to harvest the profits and move on to greater opportunities even though it seemed just to be forming a base.

Would prefer the Canadian banks. Lifecos are difficult to analyse. This has gotten so big that is time for them to prune some assets, so selling off their US assets may be a smart idea. He is not so sure this is going to benefit much from rising rates.

There are unconfirmed reports that it is going to spin off or sell the John Hancock unit in the US. Seasonality is from mid-September until the end of the year. It has gone sideways ever since. It has recently been testing its all time high. It is outperforming the market and trading above the 20 & 50 day moving overages. This will probably go down with the market. It is a good time to take money off the table if you are a trader.

There was a report today that they are considering spinning off their John Hancock division in the US. He has a tough time with the insurance industry. Even though rates are going up, they are going up very slowly, which is the difficult part about this business. On a multiple basis they are relatively cheap. Their core insurance business is going to take a long time to get to the kind of rate of returns they are talking about. They have a great undervalued franchise in Asia, which is where there is going to be a lot of growth. Spends a lot of time and money in growing the asset management business, an area where you could see really good growth.