Manulife Financial (MFC.TO) Buy, Sell or Hold

Manulife Financial (MFC.TO)

62.10

+0.60 (0.98%)

as of Sep 25, 2026, 8:00:00 pm Market Open.

1632 watching

DON'T BUY

Owns a very tiny position. Insurance companies fund their liabilities through their investments. When interest rates are low they are not earning a great return and when equity markets are volatile, you have the same problem. Fundamentally they are going to have to claw back more capital which limits their ability to grow. Also, there could be an equity issue around the corner, which will be an opportunity to buy the stock which likely puts a ceiling in terms of appreciation potential. If the stock pulled back to below $10, it would be a lot more interested in it.

COMMENT

Caller sold an $8 December Put an collected $0.50 and also bought a $11 December Call. This is called a Synthetic Stock Position. By selling a Put and Buying a Call you are going to get a profit and loss metric that is very similar to the metrics you would have if you had just bought the stock out right. You have taken volatility out of the equation and it's a bullish trade.

PAST TOP PICK

(A Top Pick June 6/11. Up 4.9%.) 4.079% Aug 20/14 bonds yielding 3.5%. Still likes.

COMMENT

Believes the dividend is safe. They are trying to wind down the exposure they have to equity and bond markets. This has proven to be difficult. If you are looking out 3 to 5 years, he expects there will be some dramatic earnings growth from the basic businesses, which can propel the stock higher.

COMMENT

3 to 5 year hold? This is really the holding period you have to have to own this company. If you are a glutton for punishment, go ahead and Buy. He still owns a tiny position. If low interest rates persist and the market continues at these levels, they are going to have a lousy quarter.

PAST TOP PICK

(A Top Pick June23/11. Down 31.26%.) Will be substantially higher in 3 years time and even higher in 5 years.

DON'T BUY

He has not been in the insurance area for a while.

DON'T BUY

It has to do with what they do with their unearned premiums. They have to invest it. They will pay a percentage out in claims. Normally this goes into bonds but they are not low. They can’t earn a reasonable return in safety on those unearned premiums. Until it turns around it will be the case for all the shareholders. Has not been able to get rid of it on a significant bounce.

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DON'T BUY

Basically geared towards equity markets which he feels is going nowhere. It even has more leverage to interest rates, which doesn't look like they are going anywhere.

TOP PICK

(A Top Pick May 17/11. Down 20.13%.) Have revamped their product mix over the last several years to a much more profitable line. With interest rates more likely to go up in the next few years, rather than down, insurance companies will be a benefactor. Also feels investors are undervaluing their US operations.

COMMENT

B series 6.7% maturing Dec 31/51. One of the old-style capital securities and 2051 would be when the whole capital trust would wrap up normally. If they do not call it, you have the right to convert these bonds into preferred shares with a dividend well above what this company would provide in the market today. That would be a great trade in of it self. You could then convert those preferreds back into common stock at a discount to the market. They won't let this happen so they will Call this bond and a notice will be out sometime in May.

SELL

(Market Call Minute.) Doesn't like the life insurance industry. If he is right about bond yields staying low, you don't want to own in this industry.

COMMENT

Performance will have much to do with where yields and interest rates are going over time as well as where stock markets are going. If you believe that equities and markets will continue to move up and interest rates will move up, it will be a positive performer

COMMENT

On his watch list. If he thought the market was going to go to blazes, he would be more interested. If the market had a severe set back and this company got much cheaper, he might get very interested in it. In the case of a rebound, the stocks should follow and may very well lead.

SELL

You have to worry about the equity and bond markets. Bond yields falling off crushed them over the last few years. You will need interest rates to go up before MFC can go up and the equity market at least needs to stay flat. He would suggest taking at least half off the table if you got in at the bottom.

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Manulife Financial (MFC.TO)