Manulife Financial (MFC.TO)

He likes this. It has traded in a sort of sideways trade since the US election. Thinks investors have taken the view that this is sympathetic to the interest rates trade. It has been in a bit of a holding pattern since December until quite recently. With the bond market in a bit of a selloff mode and the recent rate hikes, their macro tailwind is in force once again. This is increasingly a play on Asia, and they are a dominant player in many of their markets there. Not expensive at 11.5X earnings and yielding 3.5%.

A great global franchise, and has made some very good strides since the financial crisis. Part of the reason the stock has not gone up is because of a lot of noise, a lot of moving pieces in their earnings. Their core franchise, especially outside of North America, is very impressive. If interest rates were to go up a little, it would help them make a lot more money. He is bullish on this company.

Sell and Buy back in the fall? If you are going to own something as large as this, he wouldn’t bother trying to trade around it. The direction of interest rates seems to be pointing up. This is worth Buying and Holding.

This goes up and down with the daily thought about rates. The company is doing a good job and has lots of growth in Asia. Expects there is 10%-12% in earnings growth, and the chance of a dividend increase in early 2018.

(A Top Pick June 3/16. Up 30.3%.) At that time, it had better growth than its peers and was trading at a discount. Also, insurers do well in a rising interest rate environment. Even though this is reasonably valued, it has lost its price momentum. He sold his holdings.

(A Top Pick July 25/16. Up 35.38%.) He is seeing more short-term opportunities in long-term stocks because of some sort of sideways event going on in the market.

They’ve been doing much better. His big objection is that they have so much focus in the far East. He would rather have more European/North American focus. Prefers Canada Life. Dividend yield of 3.5%.

(Market Call Minute) It would be one he would add for financial exposure. He is expecting a turn in financials for an insurance company. He would go for RY-T for a bank.

The 10 year US bond yields hit 2.6% and went back down to about 2.15%. Lower interest rates are not good for this company and they also have some energy exposure. What is good, is that it is trading at about 5% lower than its peers. Also, has a good growth rate of about 8% and has US$ tailwinds. If you can get this at $23, you should be good.

He does like the insurance space. It is going to be challenged. Life expectancies are extending and the higher interest rate liabilities are extending. He thinks rates stay low for the next decade or two.

He respects their business and what they are doing in terms of being global, especially with their exposure in China. It also pays a dividend. All of that is positive. The issue he has is that it is a hard stock to make money on. They recently reported earnings having a strong quarter. With their dividend of about 3.3% and trading at 11 or 12 times, that yield and Price to earnings valuation is very much in line with where Canadian banks are right now, and he would rather own Canadian banks.

The insurance company he would be a buyer of today. The nice thing is the global diversification. You are getting the US business, the asset manager and the underwriting life insurance business, but more importantly you are getting the Asian exposure, in particular China. If you just tuck this away, as rates creep higher globally and the insurance markets heal, it’s a company you need to own.

Technically it has been in a downward trend lately. Seasonality, it is very similar to the banks. We are in a period right now where the stock is probably going to continue to press the support levels. If it holds, that’s great. There is no real rush to be a buyer until you get into early October.

Relative to Canadian banks, this will get more leverage to rising interest rates. With rates going to rise, this would be a good one to participate in. Not a bad place to be.

He likes the insurers, and feels they are undervalued at this stage. This is trading at about 10X forward earnings, and BV is just over 1.1 or 1.2. Also, pays a pretty decent dividend of 3.4%. The reason it has dropped off along with other insurers is that there has been a bit of a scale back on long-term interest rates, and insurers are really based on where interest rates are going on the 5 and 10 year rates. He likes their exposure in Japan and other parts of Asia.