Manulife (Symbol-MFC)

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Shakespeare
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Manulife (Symbol-MFC)

Post by Shakespeare »

After considering Dominic D'Allesandro's responses[*,**] to the Portus situation, I think this company is worth consideration. I know the price isn't great - $60.99 today - but I can't forget Munger's doctrine that "a good company at a fair price is better than a poor company at a good price" and MFC has lots of growth potential. But ethical management is worth a premium.

If it dips below $60, I'll start a position.


[*] If you're at the top, you're responsible and you're gone. Sends a much better message to the rank-and-file than just firing the middle management and leaving their bosses in place.

[**] Full restitution for Manulife Portus buyers.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Bylo Selhi
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Re: Manulife - MFC

Post by Bylo Selhi »

Shakespeare wrote:If it dips below $60, I'll start a position.
Earlier this year when the extent of MFC's endorsement of Portus became known and the stock got beaten down to ~$57, I decided to wait for it to drop a buck or two lower before piling in. I'm still waiting :(

Perhaps I should just take my lumps and try to get in under $60 too.
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Post by beaverlodge »

For those with a 'conscience and a memory' Manulife sells life insurance and other forms of family protection and a stable of impressive funds with what many consider high MER's
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Post by Springbok »

Beaverlodge wrote:For those with a 'conscience and a memory' Manulife sells life insurance and other forms of family protection and a stable of impressive funds with what many consider high MER's
Did I read that they were now operating in China and perhaps India? The cultures in those countries are quite different from our's. I stayed away from Manulife and Sunlife because of concern of these new ventures dragging them down.

But, almost every large Canadian equity Mutual fund includes them, so what am I worried about?
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Post by Bylo Selhi »

Beaverlodge wrote:For those with a 'conscience and a memory' Manulife sells life insurance and other forms of family protection and a stable of impressive funds with what many consider high MER's
That's why I also own IGM stock but nothing they sell.

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Post by beaverlodge »

You have nothing to worry about. They are well managed, have been successful for more than a century, have products that consumers need and demand, they create wealth, are environmentally friendly and are well known around the world including many cultures other than ours. And the present CEO is well respected and has guts - two virtues lacking in many corporate suites.
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Post by yielder »

Yep, I'd buy below $60 if I didn't already own it from March 03 at 48.91. I've been DCAing into it every quarter. I'm pleased with the 15.9% annual return and the dividend increases which now give me a 2.5% income return on the original investment.

It's been a player in the Far East for years so it has the experience there. I wouldn't be surprised to see another acquisition now that Hancock is complete.

Code: Select all

For the year ended Dec 31 2004

                                 MFC       GWO       SLF
Per Share Indicators
Sales per Share                 37.52     24.52     34.99
Earnings per Share               3.65      1.79      2.81
Cash Flow per Share              8.32      3.36      4.84
Book Value per Share            28.63      9.13     24.34
Dividend per Share               0.99      0.68      0.88
Dividend Yield                   1.79      2.57      2.19
Market Price                    55.40     26.70     40.15
Price/Earnings                  15.18     14.88     14.29
Common Shares Outstanding     807 mil   891 mil   592 mil

Performance Indicators
Return on Capital                N/A      20.11     13.01
Return on Common Equity         15.93     20.52     11.84
Return on Total Equity          15.68     18.43     11.84
Return on Assets                 N/A       2.61      1.37

Financial Indicators
Operating Margin                 N/A      11.82     16.70
Net Profit Margin                9.79      7.59      8.02
Interest Coverage                N/A       N/A        N/A
Dividend Coverage                3.64      2.47      3.26
Debt to Equity                   0.25      0.26      0.16
Quick Ratio                      N/A       N/A        N/A
Current Ratio                    N/A       N/A        N/A

Growth Indicators
% Change in Profit              65.85     34.30     28.42
% Change in Revenue             65.13     61.58     (1.80)
% Change in Assets             102.80     (1.64)     0.63
5-Year Profit Growth            24.02     23.88       N/A
5-Year Revenue Growth           14.17     10.41      7.96
5-Year Asset Growth             23.36     12.36     10.28
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Post by gyrfalcon »

yielder: "...and the dividend increases which now give me a 2.5% income return on the original investment. "

gyr: "...The current Divvy is 7.9% on my cost, a calculation I believe to always be useful."

yielder: "In what way?" Twisted Evil emoticon

gyr: In the same way as yourself. ;^).
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Post by yielder »

gyrfalcon wrote:yielder: "...and the dividend increases which now give me a 2.5% income return on the original investment. "

gyr: "...The current Divvy is 7.9% on my cost, a calculation I believe to always be useful."

yielder: "In what way?" Twisted Evil emoticon

gyr: In the same way as yourself. ;^).
And that would be?????? :twisted:
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Post by Shakespeare »

$60.30 and still heading down....
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Post by Shakespeare »

Well, that was an interesting day. :wink: I didn't get my limit bid in fast enough, although MFC traded below it at one point. Never mind; if this volatility continues for a while a good price will come. :twisted:
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Post by gouthro »

Did I read that they were now operating in China and perhaps India? The cultures in those countries are quite different from our's. I stayed away from Manulife and Sunlife because of concern of these new ventures dragging them down.
I have noticed that stories of Avian Flu seem to be increasing and that It is being now found in various places throughout the world. There are dire predictions of enormous loss if life, should this thing take off. Although other dangers were mentionned with the life insurance companies, I don't recall anyone mentionning this possible danger. If such a catastrophy should strike I would imagine that life insurance companies would be hit pretty hard. Have any of you more knowledgeable investors considered this?
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Black Box

Post by Small Investor Activist »

It's interesting there was an analyst at Merrill Lynch who was fired recently some say because he was knocking Manulife's accounting.
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Post by Chuck »

gouthro wrote:I have noticed that stories of Avian Flu seem to be increasing and that It is being now found in various places throughout the world.
The SARS overhype has left me numb. No idea whether avian flu is a real threat or just a product of more massive media overkill. The trials and tribulations of living in a sensationalism driven media world.
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Post by gouthro »

The trials and tribulations of living in a sensationalism driven media world.
Chuck,
I agree with you that there is a lot of sensationalist hype about this. But, in this case, I believe there is something more than hype. For it is not only journalists but also scientists and health professionals that take this seriously.

I am not trying to create panic, I simply was wondering, with all this talk about buying life insurnace companies, what the affects would be, should this actually arrive. I do believe it is a realistic threat and calls for, not panic, but at least preparation.
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Post by Shakespeare »

Filled 100 at $59.96.
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Post by Bylo Selhi »

In at $59.67 :P

Of course if the asian flu pandemic strikes, buying into life insurance companies, especially ones trying to expand in Asia, may not be the brightest of investments :)
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Post by gouthro »

Of course if the asian flu pandemic strikes, buying into life insurance companies, especially ones trying to expand in Asia, may not be the brightest of investments
I didn't think anyone noticied this problem, as no one responded on the earlier post. Although I believe that this pandemic is within the realm of reality ( and not just media reality ) I none the less bought in to Manulife at 29.50. I had been planning, however, on a larger swath of life insurance companies, since they seem to keep raising their dividend and have good growth prospects. But, I think I will keep my exposure to this sector down a little more than I had planned.
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Post by yielder »

Bylo Selhi wrote:In at $59.67 :P
Of course if the asian flu pandemic strikes, buying into
any equities may not be the brightest of investments. If a little hiccup like SARS had an economic impact, think about the impact of a flu pandemic. If it's on this scale, the fear factor will have a huge ripple effect.

These are the kinds of events that you can't take into consideration when building an equity portfolio unless you choose to buy treasuries.
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Post by Shakespeare »

These are the kinds of events that you can't take into consideration when building an equity portfolio unless you choose to buy treasuries.
Especially because you could be too dead to enjoy your retirement. :wink:
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Post by gyrfalcon »

"These are the kinds of events that you can't take into consideration when building an equity portfolio unless you choose to buy treasuries."

Well, I for one don't really agree, given that **this** is a life insurance Co. we're discussing here. If you truly mean it to apply only to a total "equity portfolio", fine, I agree.

I thought gouthro's original point was rather thoughtful & I appreciated it; just saw no need to comment. ;^). gyr.
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Post by yielder »

gyrfalcon wrote:Well, I for one don't really agree, given that **this** is a life insurance Co. we're discussing here. If you truly mean it to apply only to a total "equity portfolio", fine, I agree.
Life insurance companies have pandemic risk. Travel companies have terrorist risk. P&C insurance companies have natural disaster risk. Pharmaceutical companies have product liability risk. And on and on. You can acknowledge the risk and buy the best managed companies as cheaply as you can as part of a diversified portfolio or you can minimize this particular type of risk by buying treasuries and accept the associated lower return.
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Post by gyrfalcon »

Bird flu is a listed item in a drop-down Info menu at the "Insurance Information Institute".

" ... There has been no known human-to-human transmission of the virus.

It is possible that the H5N1 virus could mutate so that it can pass much more easily from birds to humans and from there spread among humans. If that were to happen, public health experts warn that the disease could potentially spread to kill 100,000 to 1.7 million people in the U.S., and 180 million to 360 million people world-wide."

.... "Even if the H5N1 strain does not mutate to infect humans, the economic costs associated with avian flu strains could easily be in the billions if other countries, such as Mexico, impose bans on imported U.S. poultry and U.S. consumers avoid buying domestic poultry. Still, the economic costs are very different from the insurance costs. The following is an overview of potential types of insurance coverages and the exposures involved: .... .... "

http://www.iii.org/media/hottopics/insurance/birdflu/

And separately, a pdf file, easily googled [bird flu actuary OR actuarial "life insurance"]:

Regulatory Review Framework Recommendations
from the American Academy of Actuaries’ SVL II Work Group
Presented to the National Association of Insurance Commissioners’
Life and Health Actuarial Task Force
Boston, MA – June 2005

"p. 2
The traditional view of a reserve is that it reflects a gradual buildup of a savings account that will be paid out in the
future. Adjustments to the reserve may reflect that not quite all of the reserve amount will be paid out, or that some
additional amounts are needed. Tail events (sometimes described as High Impact Low Frequency) describe conditions
that may never require a payout or may require a payout that could never have been reasonably anticipated via the
traditional reserve or capital accumulation process (for example, external events like a disastrous bird flu virus mutation that kills millions or a total collapse of the financial markets are not expected to be pre-funded in reserves). Rather, the more effective focus has been on early warning signals that show exposures like concentration risk or financial guarantee exposure, etc., so that steps can be taken early enough to ensure that a proper risk response can be taken. ...."

Certainly the industry is aware of it as an issue. gyr.
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Post by Shakespeare »

Certainly the industry is aware of it as an issue
The protection against this and other unforseen external events - including tax or regulatory changes - remains good diversification.
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Post by gyrfalcon »

"good diversification"

I just did a calculation: 1.55% of my assets are in MFC, indirectly. It's not as if this concerns me in the least. I just like to see issues out in the daylight. gyr.
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