Manulife Financial (MFC.TO)

(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.

It has been frustrating, but he sees their earnings next year being 25% better than this year. They have been hit by their energy book, actuarial charges and lower rates. They are so much cheaper than SLF-T. The 4% dividend will grow 12% annually. Buy it on the US side if you have US cash.

This one has always had something come up and they stumble. He is warm toward the lifecos, especially as rates start to go up. He prefers SLF-T.

This has pulled back, a lot like US banks. Lifecos are all exposed to interest rates, and get squeezed when rates don’t go up. This has a lot of growth in Asia that is kind of non-interest rate exposed. They also have John Hancock in the US. He is showing 9X earnings and a discount to Book forward, which is as cheap as these things get. It will go back to $21-$22. Dividend yield of 4.03%.

(A Top Pick April 14/15. Down 13.61%.) This has been very disappointing. Energy exposure in their portfolio has hurt them. Very attractively valued, trading below BV. Longer term she likes their exposure in Asia. Despite a disappointing 4^th quarter in February, they raised their dividend by 9%.

With insurance, a lot of profitability comes from current interest rates, which are not going up as expected. We had a break of the trend early this year. The old support level is the new resistance level. If it breaks $19-20 it may go back to the old highs, but he would not buy it.