Manulife Financial (MFC.TO)

Shares are near 2007 highs. Good balance sheet and managers. He likes the lifeco business, but he will start divesting MFC. MFC is no longer cheap.

"The longer the base, the bigger the time in space." Investors were patiently clipping coupons, and now there's been an upside breakout. Anyone who bought recently is in the green, and that's really positive. 

His contrarian view is that rates are actually going higher; pause for 6-9 months, but then inflation's coming back. If not interest rate increases, it will at least mean no more cutting. Higher rates are pretty positive tailwinds for insurance companies. So even if you've got a gain, keep holding.

Performance of stock has been excellent. Strong assets - very happy with price appreciation. God asset base with reliable management. Owns shares and will continue to hold.  

In financials, his biggest weight is insurance. His #1 position is FFH in P&C, but MFC is a significant position as well. He also has IFC. This group is behaving well. 

Ultimately, you're buying a giant investment portfolio. Capital markets look pretty good, Asian exposure is attractive.

Likes the breakout. His #2 choice in the space, behind FFH at #1, but ahead of SLF.

Stock spent a long time underwater if you bought before the financial crisis. All of a sudden, has become the belle of the ball. Took off after de-risked LTC and annuities businesses. On wheels ever since.

Business doesn't have opportunity to reinvest earnings. Dividend payout good, but would rather high rate of return on capital. Compared to a high quality business like Constellation Software - not as good a business. Company will benefit from lower interest rates, but believes there better options for investors out there. Also not founder led/owned. 

It is at its highest level in a year. It has 3 major features: top line growth, margin expansion and dividend growth. It is getting out of long term care which is a catalyst. Growing at 9.3% and trading at 9X it is still cheaper than its group. He considers it better than the banks. Lower rates will help with their charges.
Buy 12  Hold 5  Sell 0

Hard to buy at these prices. Has done all the right things. Overhang of LTC business is gone. Traditionally, benefits more in a rising, not falling, rate environment. Bigger story is focus on Asian growth of middle class and asset management.

Likes the dividend, and its growth recently of 10%. Benefits from our being 6 months into a 3-year cyclical bull market. Over time rates will move higher, which is good for insurance companies. International. Some risk in China.

De-risked US business, the weakest unit. He's looking at it, on shopping list, hasn't yet pulled trigger. Re-rated nicely, undemanding multiple, single-digit PE ratio. Yield is ~4%. Pay attention to chart validating fundamental changes, often a leading indicator of changes within. Wouldn't quarrel with investors taking a position.

Up 25% YTD. Great dividend ~4.5%. Well diversified asset base to generate revenue from different streams. Only about 9% upside from here. Not a bad time to trim if you have profits, though you can probably ride it a bit higher. For new money, wait for better entry point.

Likes the turnaround. Asian exposure working out. This name is higher risk, higher reward.

Good place to put money now with the Canadian dividend tax credit.

It's been a way to play higher-for-longer interest rates. But he doesn't know how it will do if rates go down. MFC's core business has been doing well and could expand. It benefits from aging demographics through its life insurance business.