Manulife Financial (MFC.TO)

(Top Pick Sep 11/12, Up 47.71%) They hedged a lot of their problems with the markets. One can see earnings getting back and going higher over time. He has to buy things when they are cheap and out of favour as long as he thinks they will come back.

Coming out of the blue in his blog $18.18 model price. As interest rates move higher they will do quite well.

Biggest beneficiary of rising interest rates. Next 6-12 months he doesn’t think interest rates will normalize, but if they did it would be a good buy. Don’t chance insurance companies here.

Was stunned to see a report that there is a huge increase in short interest. Maybe US hedge funds are doing the same thing as they did to banks. He likes conservative banks.

He is more interested in TD because of 10 times earnings vs. 12 times earnings with MFC-T.

Any time this company can issue an earnings report that is not convoluted with all kinds of footnotes, you have to like it. Came out very clean last quarter. Companies like this will do very well in a rising interest rate and rising stock market environment. Pays a great yield.

Rising interest rates are good for insurance companies, falling equity markets are bad for them. Doesn’t think there is a material downturn (i.e. ~20%) in the next year, though.

Has pretty good wealth management exposure. Some capital should get freed up. You should see substantial improvement on ROE in the next few years.

Seasonal strength from early March to Mid-June. Nice chart with upward trend, outperforming TSX and above its 20 day moving average, but be careful because we are ending the period of seasonal strength.

(Market Call Minute.) Wait for a pullback. It has had a good run.

If there is an upward movement in interest rates, this is one of the best levered to rising rates. He recently reduced his position because it has had a great move. Has international diversification in the Far East. It will benefit from rising interest rates.

A leveraged play on the tailwind that is helping the life insurers. Once you get bond yields going up, which reduces its cost of liability, this stock price will motor. Big Asian exposure. Yield of 3.15%.

If interest rates start to go up, this will help one part of the valuation equation. If the stock market continues to go up, it will also help. Basic business appears to be doing very well. If there is a market correction, you will see this one pull back, so he would not jump in here.

Down last two years but up on the current one. They lost some of the leverage to improving equity markets through hedging. But benefit from emerging markets. Good long term hold and you could own it here.

Likes life insurance over the banks. See interest rates going up eventually. Equity markets going up as well, which is also positive for them.