Manulife Financial (MFC.TO)

It is on his radar. Thinks there just might be enough time that it has worked its way out of being a value trap. A small starter position of 1.5% might be acceptable, but you will need a strong equity market.

Pretty much exactly the same as Sun Life (SLF-T) in that the dividend appears to be pretty safe. The one thing that is improving slightly is the probability of them doing a sizable acquisition (ING’s Asian insurance) on highly dilutive terms. Could face an actuarial review, so there could be a further write-down of $0.55 this quarter. Held hostage to bond yields.

(A Top Pick Oct 17/11. Up 14.7%.) Series 2. (MFC.PR.B-T) 4.65%. A perpetual preferred share with a possible call date March 19. Still likes and thinks it will get up to $25-$26.

(Top Pick Oct 28/11, Up 22.43%)

Preeminent insurance company both here and in the US. Has been having a tough time because of risks taken to increase earnings. They have been in a retrench process and until the process is completed we don’t know what the core earning power really is. Until we know that, it is difficult to put a valuation on it. However, it has been trading at or below Book for quite a while so this is a good place to start. Doesn’t see a lot of upside in the short term unless interest rates move sustainably higher or until they can show core earnings are a lot higher.

Won’t get back to the $20 level again for a while. In the short term, he would be looking for a $14 target. If it gets down to the $10 level, that is probably a fantastic buying opportunity if the market starts to gain some strength.

Low interest rates are a real penalty and they suffer when equity markets do not do well. This is really a leveraged play on the performance of the capital markets. However, their underlying sales, particularly outside of North America, are phenomenal and growth prospects are exceedingly good. Working their way through the sins of the past and the current problems. Likes the story longer-term and is on his Watch List. He will be a buyer at $10.

(Top Pick Oct 14/11, Down 4.73%) Fundamentals look good, technicals look good.

Don't hold more than 5% of your portfolio.

Doesn’t see this breaking out of the doldrums anytime soon. Had talked about selling his holdings, but given the fact that the markets may pleasantly surprise next year with housing continuing and Europe possibly making a comeback, he has decided to Hold.

Manulife (MFC-T) or Power Financial (PWF-T)? Big driver for these are the markets. He is cautiously optimistic and feels that in the short run, markets are okay. Low interest rates are also challenging for lifecos. Asian growth is attractive for Manulife but Asia is having some difficulties right now. Feels there are better sectors to focus on for either one.

Make money, but not as much as they used to. People want them to make a lot more money but it is just not possible when interest rates are so low in the insurance business. It is very hard for them to re-price their policies aggressively. Balance sheets for insurance companies are heavily weighted to interest rates. He has a very small position.

Still suffering from its financial crisis hangover but that is gradually working its way through the system. 2012 was this company’s return to real profitability. Hedged a lot of their exposure to equity markets. Low interest rates are hurting, but they are dealing with it. Expect they will return to $1.20 earnings range next year, which makes it a 10X earnings stock with a 4.5% dividend yield. Adequate capital ratios. Great growth in Asia, Japan, China and Indonesia.

(Market Call Minute.) No problem with sales. They are selling stuff like hotcakes. Loves the Asian experience. You have a capital markets and interest-rate problem. Would look at it at $10.

(Market Call Minute.) Cheap, but there is the overhang and concern of low interest-rate impact on earnings. Analysts are very bullish on earnings next year. If they are right, then the stock is cheap.