CI Financial Corp (CIX.TO)

(Market Call Minute.) The whole asset management sector is undervalued. He likes this.

This has been a really well managed company, and managed to do what most other independent mutual fund companies haven’t. They competed very effectively against the banks, who obviously have an advantageous position with their reach. Recently they’ve gone more into redemption, meaning that some of their unit holders are exiting. Some of their bigger franchises have had slightly less good returns. Also, there is a spotlight on fees, which is an issue. If you take a long term view that equity markets are going to do very, very well over the next number of years, this company will likely be okay. Technically it is close to a 52-week low. This is a bit of a wait and see.

Just acquired First Asset Capital which gives them a beachhead into the ETF space. A nice 4.6% dividend, which he sees growing at 10% over the next couple of years. However, he only sees about a 4.7% compound annual growth rate over the next couple of years. If you are really bullish about the market and you think it is going to go straight up, then this is not a bad play. If you think it is going to go sideways and be bouncy, he isn’t sure that this is the most exciting bet. There are headwinds and regulations coming for mutual funds.

Her preference is to be in the banks and financial services space. If you want more of a direct play on mutual funds, this is probably one of the better names to own. Given the valuation contraction that we have seen in the banking sector, her preference would be to own one of the big banks, or maybe a lifeco.

A “steady Eddie” company and a very good company in its area. If you are there for yield, it is slow and steady. If you have something better to buy, then this could be a Sell.

Because of high fees, and new transparency rules, they will have pressure on them. CIX-T is going to be a survivor. They have done a great job and will continue to do so.

This has been the class act in the mutual fund business. Mutual funds are in secular decline, but this one has done everything right. They have been getting market share.

Great management team. This is a competitive sector. Demographics are going to be in their favour. Some people want a non-bank as a place to do business.

(A Top Pick June 4/14. Up 6.19%.) Once Bank of Nova Scotia sold off its stake, it allowed this company to be what it wanted to be.

A good company with a lot of good upside. If you believe the bull market continues, as he does, this is a good place to play. They have $100 billion in assets with a goal to grow it to $150 billion over the next 5 years. 4.2% dividend is safe. The only thing that concerns him is the changing regulatory environment.

A lot of people are moving to the ETF market. The mutual fund industry is not growing quickly. The mutual fund industry has to bring their cost structure down. It can survive and at some time there could be more acquisitions.

The mutual fund industry is a slower growing business than it was back in the 90s. Now it is more growth by market appreciation and slower accumulation. In this space, this company is the best operator in the Canadian market. They run a very lean business and keep their costs low. Have a great sales force and a lot of recognition. Tends to trade at a bit of a premium to the whole space. A good name to own for the long-term.

(Top Pick Nov. 12/13, Down 0.52%) His position is about a third of what it was a year ago. It will continue to do well, but there is some black clouds over the Canadian market.

(A Top Pick Nov 6/13. Up 3.76%.) He really likes the asset management business. If we are in a secular bull market for equities, the companies that have done a good job managing money are likely to see more dollars come in the door. This company has done a great job. Still likes.

One of the biggest independent mutual fund companies. He likes this business. The last few men standing are going to make a lot of money. They’ll probably have to cut some of the prices of its funds. He is bullish on stock markets and thinks this will continue to do very, very well.