Manulife (Symbol-MFC)

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Re: Manulife (Symbol-MFC)

Post by Justise »

scomac wrote:The CEO is in the news today pumping his stock by means of complaining about how rigorous Canadian accounting standards are versus the US standard: "We'd be making billions if we could file in the US!"

[url=http://www.theglobeandmail.com/globe-in ... le2223793/]LINKurl]

I was in my bank the other day and had a chat with my banker, who is a financial adviser. He showed me the S&P 500 P/E ratio said by him to be the lowest in history (meaning, the stocks in the US are exceptionally cheap and therefore a screening buy). I didn't have a close look but simply asked him a very basic question i.e. how much of that is due to accounting change? The case of MFC is a classical case not to mention those of the US banks in particular. Obviously, he was dumb-founded. My question will likely give him a wakeup-call in reading into the P/E and earning reports for the US.

Anyone ever analyse the big differences between International Financial Reporting Standards, the Canadian GAAP and those of the US?
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Shakespeare
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Re: Manulife (Symbol-MFC)

Post by Shakespeare »

10.25 yesterday. Shades of the bottom a couple of years back, which was 9.65. :shock:

Time to look at a trade?..... :mrgreen:

Added: 300 at 10.34.
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Re: Manulife (Symbol-MFC)

Post by mpav »

I have put options at 10 dollar strike (June 2010)....mmmm wonder if they will hit.

This is one name I took a beating on, but like you just cant get my head around how low the price has gotten.
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adrian2
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Re: Manulife (Symbol-MFC)

Post by adrian2 »

Shakespeare wrote:10.25 yesterday. Shades of the bottom a couple of years back, which was 9.65. :shock:

Time to look at a trade?..... :mrgreen:

Added: 300 at 10.34.
Time to bank a quick buck or two?
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Re: Manulife (Symbol-MFC)

Post by Shakespeare »

A limit order at $11.50 executed yesterday while I was at the beach sleeping.
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Re: Manulife (Symbol-MFC)

Post by kcowan »

Shakespeare wrote:A limit order at $11.50 executed yesterday while I was at the beach.
Like "I made $xxx on my investment while sunning on the beach in Hawaii!" Congratulations! :thumbsup:
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Re: Manulife (Symbol-MFC)

Post by Shakespeare »

Except $xxx is only about $300. I don't risk more than a few $K on a trade.
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Re: Manulife (Symbol-MFC)

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Shakespeare wrote:Except $xxx is only about $300. I don't risk more than a few $K on a trade.
OTOH, that's 10% in a month. Not too shabby in my books. :thumbsup:
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Re: Manulife (Symbol-MFC)

Post by Descartes »

Little to bank on with insurance industry stocks, analysts predict

Financial results due this week on February 9. The following was an eye opener...
Manulife is the most heavily shorted stock on the Toronto Stock Exchange, and Sun Life and Great-West also rank high on the list. Combined, the three have a total short position on the TSX amounting to $2-billion worth of stock.
I don't own any common shares of an insurance company any longer (and haven't owned MFC since prior to the dividend cut).
"A dividend is a dictate of management. A capital gain is a whim of the market."
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Re: Manulife (Symbol-MFC)

Post by Peculiar_Investor »

For those thinking about a future dividend increase, Manulife won't up dividend till its leverage drops | Reuters
Manulife Financial, which slashed its shareholder dividend three years ago, is unlikely to consider raising the payout until it lowers a key debt ratio, the company's chief risk officer said on Wednesday.

Manulife, Canada's biggest insurer and owner of U.S. insurer John Hancock, halved its dividend in August 2009 to preserve capital after weak financial markets devastated its profit.

Since then, the company has hedged its market exposure and pulled back from unprofitable business lines. However, its leverage ratio is well above its target of 25 percent. It was 33 percent at the end of 2011.

Leverage is the use of financial instruments or borrowed capital to try to increase investment returns.

"What you will see is we'll want to bring that leverage ratio down a little bit over time before we look at maybe dividends," Chief Risk Officer Rahim Hirji told a financial conference in Montreal.
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Re: Manulife (Symbol-MFC)

Post by adrian2 »

MFC.jpg
Interesting graph from TDW arguing that Manulife is due for a correction due to its "extremely high correlation to U.S. bond yields (r2 0.9 over past two years)".

IOW, being long MFC is highly correlated to a short position in long term bonds. I can live with that.
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Re: Manulife (Symbol-MFC)

Post by Peculiar_Investor »

When all else fails, change the goal posts. From Manulife Financial reports 3Q12 (my bold)
In the third quarter of 2012, we are introducing core earnings, a new metric, to help investors better understand our long-term earnings capacity and enterprise value. For more details on this non-GAAP measure see Section A of the Management's Discussion and Analysis. Core earnings measure the underlying profitability of the business and remove mark-to-market accounting driven volatility as well as a number of items that are material and exceptional in nature. While this metric is relevant to how we manage our business and offers a consistent methodology, it is not insulated from macro-economic factors which can have a significant impact. In the third quarter of 2012, Manulife generated $556 million of core earnings. For the quarter, the fully diluted core earnings per common share excluding convertible instruments ("core EPS")3, was $0.29 and core return on common shareholders' equity ("core ROE")3 was 9.3 per cent.
Previously Manulife has gone to great lengths to report results using both Canadian GAAP and US GAAP, and to no one's surprise, they usually highlight which ever is better.

I realize that companies like Manulife are complex beasts and their accounting and reporting is very complex. In hindsight, as an individual investor I probably shouldn't be stock picking in this section as it near impossible to analyze their financial statements.

But when a company introduces a new metric "to help investors better understand", that's a big red flag to me. Reminds me of the technology space, which classifies serial re-structuring and stock option grants as "one-time" charges. Who do they think they are kidding?

Now the big decision, do I put my money where my mouth is and vote with my feet? Stay tuned.
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Re: Manulife (Symbol-MFC)

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Peculiar_Investor wrote: Previously Manulife has gone to great lengths to report results using both Canadian GAAP and US GAAP, and to no one's surprise, they usually highlight which ever is better.
I can't agree with you on this point and I've read the reports every Q. I would say the results have always been reported according to Cdn GAAP and the US GAAP results have been reported as secondary information. I would also say that this has been quite an eye-opener, reflecting more on the validity (or not) of US GAAP than on Manulife. I will also say that reporting the two results is totally valid when a company is traded both in TO & NY and is, obviously, compared to large US competitors, at least in NY. gyr.
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Re: Manulife (Symbol-MFC)

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Rally is over in Manulife, Great-West Lifeco shares: Barclays - The Globe and Mail
There’s still long-term value in holding shares in Canadian insurers Manulife Financial Corp. and Great-West Lifeco Inc., says Barclays analyst John Aiken. But he believes the rally that began this summer and brought shares to around 52-week highs has come to an end.
(Out of GWO - and SLF - still have a little MFC left as a reminder to sell all instantly when the dividend is cut.)
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: Manulife (Symbol-MFC)

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He thinks investors will have to be patient for further price gains, as book value stagnates.
I hope he's right so we can get a little pull back so I can do some more buying for the next leg up on all four, MFC SLF GWO AND IAG.
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Re: Manulife (Symbol-MFC)

Post by Shakespeare »

And out at $14.38.

I made lots of money on the IPO, and the losses when I got back in were significantly less - but losses nevertheless.

If it goes back to $10 I'll look at it again.

Now totally out of insurance companies.
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Re: Manulife (Symbol-MFC)

Post by Taggart »

Shakespeare wrote:

Now totally out of insurance companies.
I've been out of all the Canadian life insurance companies since a few months ago. Won't be back in again until I see any sign of dividend growth. As long as we're in this extremely low interest rate environment, I don't think that's going to happen anytime soon.
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Re: Manulife (Symbol-MFC)

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Taggart wrote:
Shakespeare wrote:

Now totally out of insurance companies.
I've been out of all the Canadian life insurance companies since a few months ago. Won't be back in again until I see any sign of dividend growth. As long as we're in this extremely low interest rate environment, I don't think that's going to happen anytime soon.
It's not the low interest rate environment that effects insurance companies. It is the lowering interest rate environment that effects them. The interest rate decreases of the past have already been addressed with the corresponding write downs in each quarter and all new product sales have been priced with these current rates of interest. I have seen numerous announcements already of price increases across the gammit of the Manulife insurance offerings, to deal with the current interest rates.

So now, an investor needs to ask themselves what type of environment we are currently in and what kind of environment has the highest probability of happening in the future.

If you believe rates will be much lower in the future then they are today, then Manulife is a strong sell. If you believe rates will be about the same in the near future as they are today, then Manulife is a Buy and i f you believe rates will be higher in the future then they are today, then Manulife is a strong buy.
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Re: Manulife (Symbol-MFC)

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If it goes back to $10 I'll look at it again.
Won't be back in again until I see any sign of dividend growth
*Here's my current buy prices (depending on what's happening may decide to wait for lower or buy higher) but I think I've missed the boat again darn it.
The combination of these stocks I have pays about 4.41% good enough for me. If and when they are able they will likely start increasing their dividends again.

Code: Select all

	Currently 	Buy 
PWF	 $27.84 	 $25.58 
IAG	 $32.19 	 $23.64 
GWO	 $24.70 	 $21.19 
MFC	 $14.13 	 $11.23 
SLF	 $27.72 	 $21.77 

* based on nothing that matters
I hold about 5.5% now want to get to about 7-8% of equity portfolio
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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Shakespeare
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Re: Manulife (Symbol-MFC)

Post by Shakespeare »

MFC is high-beta (1.5 on TMX); there will likely be a buying opportunity one of these days.

SLF and GWO have betas of 1 on TMX.
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Re: Manulife (Symbol-MFC)

Post by Taggart »

OptsyEagle wrote:
Taggart wrote:
Shakespeare wrote:

Now totally out of insurance companies.
I've been out of all the Canadian life insurance companies since a few months ago. Won't be back in again until I see any sign of dividend growth. As long as we're in this extremely low interest rate environment, I don't think that's going to happen anytime soon.
It's not the low interest rate environment that effects insurance companies. It is the lowering interest rate environment that effects them. The interest rate decreases of the past have already been addressed with the corresponding write downs in each quarter and all new product sales have been priced with these current rates of interest. I have seen numerous announcements already of price increases across the gammit of the Manulife insurance offerings, to deal with the current interest rates.

So now, an investor needs to ask themselves what type of environment we are currently in and what kind of environment has the highest probability of happening in the future.

If you believe rates will be much lower in the future then they are today, then Manulife is a strong sell. If you believe rates will be about the same in the near future as they are today, then Manulife is a Buy and i f you believe rates will be higher in the future then they are today, then Manulife is a strong buy.
If you can successfully run your portfolio based on future predictions, either economic or business wise, by all means continue. After more than thirty years of investing, I've learned my predictions aren't any better (probably worse) than the professionals on Bay or Wall Streets. I keep it simple, and just follow the money. Each separate company tells me how well they are doing, or not. Meanwhile, our own money invested in the financial sector is invested mostly in the banks and a few other assorted that have started to increase their dividends again. No change since 2009, our allocation to the financial sector is targeted around 14 to 15%.
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Re: Manulife (Symbol-MFC)

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Taggart wrote: If you can successfully run your portfolio based on future predictions, either economic or business wise, by all means continue. After more than thirty years of investing, I've learned my predictions aren't any better (probably worse) than the professionals on Bay or Wall Streets. I keep it simple, and just follow the money. Each separate company tells me how well they are doing, or not. Meanwhile, our own money invested in the financial sector is invested mostly in the banks and a few other assorted that have started to increase their dividends again. No change since 2009, our allocation to the financial sector is targeted around 14 to 15%.
Whether you were aware of it or not, you are making as much of a future prediction with that portfolio as one would make with an insurance company. Companies and stock prices do not tell you how well they are doing, but only how well they have done. The future will determine the rest, be it for a bank stock or an insurance company.
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Re: Manulife (Symbol-MFC)

Post by Taggart »

OptsyEagle wrote:
Taggart wrote: If you can successfully run your portfolio based on future predictions, either economic or business wise, by all means continue. After more than thirty years of investing, I've learned my predictions aren't any better (probably worse) than the professionals on Bay or Wall Streets. I keep it simple, and just follow the money. Each separate company tells me how well they are doing, or not. Meanwhile, our own money invested in the financial sector is invested mostly in the banks and a few other assorted that have started to increase their dividends again. No change since 2009, our allocation to the financial sector is targeted around 14 to 15%.
Whether you were aware of it or not, you are making as much of a future prediction with that portfolio as one would make with an insurance company. Companies and stock prices do not tell you how well they are doing, but only how well they have done. The future will determine the rest, be it for a bank stock or an insurance company.
I think we're going around in circles here. If you can predict the future, by all means. Go for it.

As for MFC, I've no idea what it's going to do with it's dividend and when, in the future. I'll let the company tell me that, while I'm on the sidelines watching.
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Re: Manulife (Symbol-MFC)

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OptsyEagle wrote:So now, an investor needs to ask themselves what type of environment we are currently in and what kind of environment has the highest probability of happening in the future.

If you believe rates will be much lower in the future then they are today, then Manulife is a strong sell. If you believe rates will be about the same in the near future as they are today, then Manulife is a Buy and i f you believe rates will be higher in the future then they are today, then Manulife is a strong buy.
Some time ago, I've posted that Manulife is a strong candidate for an "anti-long bond" security. Instead of using synthetic ETS's to bet that long bonds will eventually yield more (i.e., decline in price), just buy (or have long exposure to) Manulife.
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Re: Manulife (Symbol-MFC)

Post by Taggart »

adrian2 wrote:
OptsyEagle wrote:So now, an investor needs to ask themselves what type of environment we are currently in and what kind of environment has the highest probability of happening in the future.

If you believe rates will be much lower in the future then they are today, then Manulife is a strong sell. If you believe rates will be about the same in the near future as they are today, then Manulife is a Buy and i f you believe rates will be higher in the future then they are today, then Manulife is a strong buy.
Some time ago, I've posted that Manulife is a strong candidate for an "anti-long bond" security. Instead of using synthetic ETS's to bet that long bonds will eventually yield more (i.e., decline in price), just buy (or have long exposure to) Manulife.
I don't have a portfolio that would handle major deflation, but I don't discount the possibility either.
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