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Opinions David Baskin
Prudential Financial IncPRUDON'T BUYApr 12, 2016
David BaskinStock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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An Asian pure-play in insurance. The overall Asian market was down last year. They achieved all their growth goals in the past year, though. They will benefit from long-term secular trends in Asia. He expects good penetration rates in China where the middle is growing, so PRU is well-positioned. Today, he heard that Sun-Life is taking a trip to China to learn about that market.
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Stan WongStan Wong
Darren SissonsUS Lifeco vs Financials PRU-N is at risk to interest rates on their premiums collected as he thinks yields will remain neutral. He is not keen on BAC-N either at this point for the same views of the yield curve. Things can't get any better for each right now -- a no man's land right now. He sees a bit better bid for Lifecos, but mostly from a defensive position. There are more compelling areas than these two spaces.
Cameron Hurst
Robert LauzonBAC vs. PRUDENTIAL If both benefit from wider rates, the spreads will widen for U.S. banks, which have been
pulling back. BAC has A 10% market share in the U.S. which is as big as the entire Canadian banking system. BAC has lot of exposure to the plain mortgage side where spreads should expand. Be patient and you'll see earnings and dividends. U.S. lifecos should benefit, too, but so will Canadian ones like MFC-T (which is a good entry point now). He prefers American banks over their lifecos.
When you buy a life insurance product, they have a long tail risk i.e. most of the people are going to live a long time. The company has to invest your premiums so that eventually they have assets to pay off the policy. They used to buy long bonds, which yielded 4%-8%, but now yield 2%. Because of this, insurance companies have been shopping for other long lived assets like apartment buildings, shopping centres and infrastructure assets. There is not as much liquid in them and they are harder to trade. Lifecos have had a hard time making up for those low interest rates. Because of this, he would prefer banks and casualty insurers. Sees this as a dead sector for the next couple of years.