Sun Life Financial Inc

SLF-T

(A Top Pick May 30/18, Up 3%) He liked it then and likes it even more now. Lifecos are a good defensive play at this time, especially when they are all so well capitalized.

The insurance companies are a fairly defensive position to be in. They have significant excess capital. In the most recent quarter there was new business strain, which leads to profitability later on. This is a reasonable investment to make. (Analysts’ price target is $56.45)

This is a solid stock. He did own it and took profits. He would buy back if it got to $50. A good defensive play. Good yield.

He sold it 8 months ago, but still likes it. It's come back well. Definitely the best Canadian insurer to buy, but he's backing away from Canadian financials as a whole. It's a long-term hold that pays a good dividend. They're on top of the investment markets.

Insurance in a portfolio? He sold their Power Financial holding last year. Following the banking crisis it just has not recovered. It owns GreatWest Life and IGM -- neither has done well. Insurance is a better bet than banks, he thinks. He would prefer SLF-T in Canada and AFG-N in the US.

Some of the insurers have been performing decently lately. In part because you have a dividend supporting it. 3.8% dividend yield now and sustainable. He likes the space now.

SLF vs. MFC MFC is the trading stock vs. SLF is the holding stock (more than a year). Long-term, SLF has a smooth chart, and MFC has been jumpy--but you can make money on those big swings.

Trading at 10 x earnings with 10-1% growth. Dividend yield is 3.9%. 10% of the revenues come from Asia. Very leveraged to what happens in the equity markets. Watch where it stands to the 200-day moving average.

It should be going higher. We are seeing a period of rising interest rates which the lifecos should benefit from. There is a reverse head and shoulder pattern. It is very bullish. It should test at $51/52. Buyers are stepping in to accumulate the stock. It is poised for further upside in 20/21.

They've done well in recent years by being conservative and taking little risk in some of their businesses. That's resulted in good dividends and earnings that aren't as volatile as their peers. However, their growth isn't as strong. Asian has been a bright spot for them. Overall, it's a decent company and it's safe in a volatile market, but this isn't the highest growth stock around.

Is China hurting MFC-T? He owned MFC-T going into the 2008 crisis. But when the management announced they had taken on undue risk, he exited. They have never really reemerged from this. They were too exposed to equity markets back then, and decided to exit equities just as the market rallied to all time highs. He thinks there are better opportunities out there -- like SLF-T.

(A Top Pick Dec 15/18, Down 5%) They are expanding insurance operations in Asia. They have excess capital of $2.3 billion. They could do an acquisition or buy back shares. Extremely well run so he continues to like it and hold it.

Had been best performing Canadian lifeco. But it's fallen out of bed, nothing is sacred in this market. Support around $40, and it's close now. Will probably bounce back, but needs to firmly break past trend line before he can call it an uptrend again.

A trend around $56 earlier this year. The other level is the current $45 range. The market is stepping in now for all lifecos. SLF just had a sudden move bouncing up from $43 as buyers come in. The $45 level is solid.