Intact Financial (IFC.TO)

It has superior results to Canadian peers. The accident rate has not been lowering because of backup cameras. Profits will improve and the stock will go up. (Analysts’ target: $107.77).

(A Top Pick June 16/17 - Up 2.7%) Sold around ¾ of his positions. They have some personal auto weakness. Management is committed to turnaround. Good name over time.

He's surprised they've done so well, because they've missed several quarters, partly due to bad weather hurting their bottom line. IFC had great growth through acqusition years ago, but they've been disappointing lately. He'd rather buy a lifeco, not a P&C company,

He prefers this to Manulife. They have been a consistent operator over time. They have gone through some softness in their quarters, especially in their auto division, but he expects them to raise rates soon to address this.

Has been going up for 10 years. It is targeting 10% growth every year. It has pulled back recently but has a steady business model. (Analysts’ target: $110.35).

Switch bank stocks to this company? This is going to be a little more volatile than the banks. It has been a great, long term stock. Every time there is a natural disaster, everyone is worried about what is going to happen, and they just increase their premiums, and make more money the following year.

It is in the top 16% of his database. Earnings growth is expected to be 18% this year. The fundamentals support the break out.

Just acquired OneBeacon, the leading North American specialty provider, which will give them growth opportunities in the US. It is a highly fragmented space, so there are a lot of acquisitions upside. He models 18% EPS, and it is trading below its five-year average. OneBeacon is probably not accretive, but is probably neutral for 2017 earnings, and is really accretive over 24 months. Dividend yield of 2.7%. (Analysts’ price target is $103.)

(Top Pick Mar 31/16, Up 6%) The big fires in Fort McMurray hurt them. He sees growth continuing. It is trading at a discount. It can grow by acquisition. It has its best days still ahead of it. Rising yields in the US will help lifecos for sure. P&C won’t receive that material an impact on their business.

Analysts are calling for $6.92. They have enjoyed a really nice growth rate, but it is running up against powerful resistance at two times book value. He is optimistic, however.

(A Top Pick March 31/16. Up 2.87%.) At the time, it was cheap relative to its five-year average. It is not any more, because they had very poor earnings this year. Very conservative and highly resilient. He thinks it can go a lot further from here. Yield of 2.5%.

Industrial Alliance Group (IAG-T) or Intact Financial (IFC-T)? When you have a great business and there is a one-time event that is not replicable, and the company sells off in a material fashion, this is one of the best investment opportunities, and is the kind of opportunity that Intact Financial represents. It is hard to choose between these 2. They are both long-term holds and they both know how to manage risks.

A great business and management is 2^nd to none. They have structural advantages that enable them to earn ROE’s well in excess of the industry. If they are not making money, no one is making money. Not cheap, but he hopes to own more down the road.

He is modelling that they grow their earnings per share by 15% annualized over the next couple of years. Until recently, one of the concerns was that their BV had dropped due to preferred shares and weakness in the stock market. Last quarter that bounced back in a very big way, so their capital levels are very strong, meaning that they can boost their dividends. Also, they can grow by acquisition. Dividend yield of 2.55%.

Property and casualty insurance. What differentiates this from most other North American P&C’s is their investment shop bolted on to the insurance company. It is superb. A world class property/casualty company. This zigs when banks are zagging. An excellent company.