Manulife Financial (MFC.TO)

One of his favourite companies. A high-quality company. Since the financial crisis, this company has de-risked itself, changed its product mix, has less of a strain on new business and expanded into Asia in a fairly substantial way. If you can buy this under $20, you are going to do well over the next few years.

This has been stuck at around $20-$21 for quite some time. A rate hike would help. He is guessing that the banks and the lifecos could have a good run here if the market holds. Wouldn’t put more money into this until it got to the $21 range. This is probably going to stay range bound for a while.

(A Top Pick Sept 11/15. Down 1.31%.) This should do very well, being correlated with any rate increase. Price to book, this is the cheapest one out there.

He has not been a fan of this company. Its numbers keep coming out of nowhere, and you get blindsided. A very unpredictable situation. Also, doesn’t like that they are so dependent on far eastern growth. Feels that any significant investment in China is high risk.

Chart shows a little bit of base building which is positive, but it has to hurdle over the downtrend line. On a chart like this, it can break down either way. The odds are that it does kind of move up to get up to something a little bit higher. It looks like it wants to migrate up to the $22-$23 level. The technical target, 1^st resistance, is around $24.

(Top Pick Jun 4/15, Down 13.63%) He got out due to a stop loss. The insurance group is showing strength but he would prefer SLF-T.

Has had a number of issues in the past, especially with their US investments. Have fixed some of the issues so it is now a better managed company. Wouldn’t consider this as “Best in class”, but more or less in the middle of the pack. Their Japanese operations are very good.

This is going to be really dependent on where interest rates are moving. If they start moving higher, this stock should start moving higher. He prefers Sun Life (SLF-T) which has performed better and has a bit more diversification. However, this one is fine longer-term. Given that the 200 day moving average is falling, it is not a name he would own.

Share price performance has been disappointing. Had some headwinds in their investment portfolios through their energy exposure. She likes their position in Asia which gives him about 32% of their revenue. It is trading at 1X Price to BV. Longer-term this will have a higher core earnings growth profile. Dividend yield of about 4%.

This has very strong seasonality. Normally from around the end of January to the end of May the stock has gone up. Recently the stock has been going sideways, and slightly underperforming the market. We are getting close to the end of May and the technicals are starting to roll over a little. There are better opportunities to invest in other than this one. You want to sell into strength in the next couple of weeks.

A little cheaper than Sun Life (SLF-T). The whole industry requires higher interest rates to get moving. They delivered a bit of a surprise over the last 6 months in that they have investments in energy, and the stock pulled back. If you are a patient investor, you will do very well in both stocks. ROE is sub 10. Sun Life has a better ROE. They both have great Asian exposure which is doing well. Canadian banks will do better than either.

Sell or hold? This has been a tough one, and every quarter there are so many reasons that the shares should go up, and they just haven’t. They moved their business to becoming more focused on wealth management, which provides reoccurring revenues. Did a great acquisition of Standard Life and picked up instant clients that they could sell more cross products to. Also, have been able to penetrate in China where 30% of revenues come from now. Look at your portfolio and see what weighting you have in financials. If you are not overweight, that money would be better served in other financials such as Canadian banks.

Canadian Banks or Lifecos. You have overhead supply. It is struggling. Prices will have a tendency to go back to the ‘backline’ about $19. Chances are that it goes a bit lower. Overhead supply is those that bought higher and are tempted to sell as it goes higher.

This has become incredibly cheap at a 9.8 P/E ratio compared to a longer-term average of 10+. Lifecos need good stock markets to bring the value of their holdings up. They need higher returns from bonds. What they don’t need are bad experiences from oil/gas such as they’ve had. The business is growing like crazy in Asia and Canada, and to a lesser extent in the US.

This has global operations. Some of their Asian operations are very exciting where they have very rapid growth. In the last 2 weeks, interest rates in Canada have been declining which could have been the reason for some of the pressure on the shares.