Manulife Financial (MFC.TO)

MFC-T vs. The Banks. If you go back over the last 10 to 15 years you will find that the worst Canadian bank has done better than the best performing lifeco. This has been the poorest performer of the lifecos. The outlook appears to be for this to continue. The low interest rates are hard on them and they don’t benefit when rates go back up because then the lifecos lose value on their bond portfolio. It is a commoditized industry also. John Hancock is one of their better performing units and they are looking at divesting it. The banks are a better place to be.

Canada is an amazing company to live in, and we are all grateful to be here, but Canada has very few great world-class businesses, outside of our financial service sector. Warren Buffett would say to own the best companies you can find, no matter where they are. He likes this company. They will benefit from rising interest rates. They are in perfectly sound financial shape. Have done an amazing job in Asia, and will possibly spin off some US operations in the future. If they do, they are going to get paid a very good price for it.

Made $1 billion a quarter for the last 5 quarters. Dividend is about 3.3%. Huge footprint in China. Rising interest rates. Stock price has gone straight down. Why is it not being rewarded for good earnings? You are asking the inexpressible. The value is there. Also, with the latest economic numbers out of Canada suggesting an interest rate hike, that will be very bullish for insurance companies generally. He likes the value in the stock.

Has had a nice move off the 2016 $18 level. Some of that is in tandem with the backup of interest rates. Beyond that though there are the company specific growth opportunities which are pretty good. What he likes most is their Asian division, which is growing by leaps and bounds. Also, their wealth management division is pretty strong. The one drawback is their US operations and they’ve been talking about monetizing that by spinning it off, which could be a potential catalyst for them.

They’ve made a million-dollar profit in the last 5 quarters. Why is it going down? In the shorter term, life insurance businesses are very equity sensitive, and particularly interest rate sensitive. The expectation of rates going up in the future, is one reason you would want to own this. Sometimes there is noise in the results of the lifecos and are complex to interpret. There has been a lot of uncertainty regarding interest rates. A well-run company with a global franchise and significant exposure to Asia, so are well positioned over the long-term. If a long-term investor, this is a good one to hold.

(Top Pick Oct 28/16, Up 31.52%) He still likes it. It is beneficiary of higher rates as well as really good growth in Asia of about 35%. It pulled back from above $25. We will not repeat $31. There may be a dividend increase in 2018. It will be good enough to hold going forward (10% return).

He still likes it. Asia continues to grow and rates will go somewhat higher. The trend will continue and they will keep the multiple. He predicts 10-12% returns.

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.