Mark BonhamManulife FinancialMFC.TOWAITFeb 16, 2001

Stock performance a good sign for momentum investors. Resistance in share price appears to have ebbed. Would recommenced buying based on seasonal basis. 

Excellent franchise with highest credit ratings in the world. Very good debt levels. New CEO performing very well. Last year saw dividend increase. Higher interest rates mean better returns for the business. Will continue to own shares. 

Breaking out of a more than decade-long range. Finally have some fundamentals on LTC portfolio. Reinsurance deal was better than expected. Underlying business performing pretty well. Asia has both potential and potential risks. Not expensive. Have to see if the big institutional money moves in. Yield is 5.05%.

It's popped slightly recently. They just did a deal in which they released $1.2 billion of free capital--this finally woke up people that MFC is a little undervalued. It still is at 8x PE with a price-to-book of 1.3x. Under this CEO in recent years, they've been streamlining operations to be more efficient and adding growth. This has been a top pick of his many times.

Widely held. Had been stuck in a trading range for years. However, finally breaking out. Last week's transaction has prompted a look with fresh eyes. De-risked US business, prompting stock re-rating. Warming up to it, might pull the trigger in the new year.

Interest rate sensitive business. Would recommend buying based on chart. Sees new highs going forward. Owns shares in portfolio. Chart looking great. 

Doing well with their Asian (Hong Kong) operations. Results have been positive recently while improving bond yields helps them. Short-term prospects are good.

Is buying back stock, an ROE of 17%, and pays a 5.5% dividend. Likes their geographic footprint.

It is not trading above its 200 day moving average and has been at its consolidation level for a long time. Look for a breakout above $28. It is not a trading stock but one to buy and hold. It pays a decent dividend without big risks.

Growth continues to be limited. The shares have been rangebound between $20-30 for many years. Fundamentals are merely okay. Their footprint is mostly in Canada with an insurance business in the US, plus the Asian division and wealth management. The latter two businesses are doing well and enjoy growth, but Canada offers flat growth because insurance here is fully mature.  The US is a slow grind. Trades around 8x PE, which is cheap vs. peers and banks. Problem is flat growth. The dividend pays 6% but so does a bond. This is a show-me story.

MFC is now trading at 7.3x times the forward P/E. In the 3Q, MFC’s core EPS grew 35% to $0.92, beating estimates of $0.81. Core ROE is also quite healthy around 16.8%. The adjusted book value per share grew 4% to $30.67. The balance sheet is healthy, with long-term debt of $13B and long-term debt/equity stands at 0.21x. Overall, a solid quarter for MFC MFC has also ramped up share buybacks in recent quarters, which we like. One of the reasons we like SLF over MFC is due to its  track record. SLF is more conservative in the way they run their business. For example, SLF did not have to cut its dividend in the financial crisis of 2008, while MFC did. It has, simply, proven more reliable over the past two decades. It is a bit more expensive, but we think the premium is justified. 
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We're getting closer to a Buy signal for Canadian banks, a lot of fear is already priced in. He'd be looking to pick up some banks, given they're trading at a rarely seen below 10x. MFC and the like have held in fairly well, so he'd be looking to buy banks over insurance at this point.

It's cheap and pays a decent dividend. The problem is no growth. North America is mature, but Asia is limited for them. Is only modest growth in earnings. He doesn't know if things get better in the short term.

Share price volatility frustrating. Not building value in shares over the long run. Would recommend holding shares. ~5% yield in shares attractive. Owns shares in company.