IGM Financial (Symbol-IGM)

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Post by bbsj »

investor99 wrote:Not that cheap yet, IMO. $47 would be lovely.

It is almost near 52 week low at $41.10. Is it close to bottom?
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Post by investor99 »

I've been watching IGM intently. It is not dirt cheap on an absolute basis, but it is very cheap relative to where it has been in the last few years. I may add to my position soon.
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Post by Lemmings »

Ive been considering buying some shares of IGM but with Q1 2008 Earnings coming up on May 2, I wonder if I should wait until after then. What do you guys think about this one looking forward?

And any thoughts on AGF.B?
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Post by investor99 »

I would wait until after earnings....but it's a crapshoot really...it has had a pretty decent run up off of $41 or so...
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Post by JaydoubleU »

I think IGM is the best pick out of the fund managers. The ROE is consistently high and smokes AGF.B out of the water. AGF.B does pay a good dividend, however, and it has a great history of dividend growth. Trading around 10X now, I believe.

Don't overlook the banks as fund managers in their own right: RY bought PHN just a few months ago, and both RY and TD are attracting large sums of new money (albeit into money market funds, but that's temporary).

But why didn't you buy IGM when it fell to $41 just a few weeks ago?!

Another possibility is to go with PWF. It is the holding company for both IGM and GWO, thus giving you exposure to two of the best dividend growth stocks in Canada. It's ROE is slightly higher than IGM, and the payout ratio is lower. Still others would settle this dilemna by simply choosing POW, the holding company for PWF and some other stuff. It has a lower yield than its holdings, but the lowest payout ratio as well. Fantastic company, unjustly sold off in the current turmoil.

I own shares in BOTH PWF and IGM.
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Post by mw »

FWIW POW/PWF/IGM are in the top four stocks on a relative performance basis since March 17th out of a basket including MFC, BNS, TD, RY, GWO, AGF.B, CIX.UN, SLF.

Of the stocks in the sector I looked at, POW/PWF/IGM is only AGF.B. - returning 23.5% vs ~ 16 - 16.5% for PWF/POW.
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Post by Lemmings »

Thanks for the feedback. I did not buy IGM when it was down around 41 because im new to trading stocks and have just only recently opened a TD Waterhouse account. That actually took over a month to open! Otherwise maybe I would have.
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Post by mw »

Here's a consolidation of views on various lifeco's:

http://financialsector.blogspot.com/200 ... -2008.html

Story on Banks foray into Insurance in this weekend's Globe:

http://www.reportonbusiness.com/servlet ... iness/home
Manulife Financial Corp [MFC-T]. chief executive officer Dominic D'Alessandro has noted that banks are already allowed to solicit business exactly the same way insurers do, including direct mail, referrals, and brokers. He's on record saying he's against banks being allowed to distribute or market insurance in branches.

But, he also notes that products offered by banks and insurers are increasingly substitutes for one another and it's no longer useful to think of the sectors as being inherently different. Selling insurance in branches is one thing, but the more fundamental issue that should be dealt with first is the structure of the financial services sector in Canada, Mr. D'Alessandro thinks. And he also believes that banks and insurers should be allowed to merge, and "it is no longer useful to think of the banking and insurance sectors as being inherently different from one another."

While the banks have been setting up tents in the insurers' backyards, Manulife's reciprocating.

Mr. Skelding said that "companies like Manulife are using their adviser channels to do banking. They're saying, 'okay, if you're buying an annuity, you must have an investment portfolio, [and] do you need a mortgage? Do you want a line of credit? And so on."

"You can do it one way, and not the other way."

Many Canadians will have spotted the ads for "Manulife One," which bills itself as the first flexible mortgage account, combining a customer's mortgage with their chequing and savings account so that any income immediately starts paying off their debt.
Perhaps one longer term theme to look into: who would benefit from a relaxation of the federal law against banks directly selling insurance?

Ultimately I believe that restriction will disappear. Credit unions in some provinces (B.C. for example) do not have to have a "glass wall" - I buy competitively priced household insurance at my credit union. Sure, its a different counter. Credit unions are provincially regulated vs banks which are federally prohibited from selling insurance as part of their regular banking operations.

Depending on the regime in Ottawa, and the timing of federal elections, I could see wall-breaking provinces such as BC and Alberta (and now SK too I imagine) being supportive of such moves, although the big banks aren't HQ'd here so there is little political imperative to support what would be something of a public relations minefield.

But eventually it'll happen. So... the question to ask is are any insurers likely take out targets? Invest in a good one for today, with potential takeover upside...
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Post by JaydoubleU »

That's a great review of the lifecos, there mw. I hadn't read it yet.

Nicely sums up one view, at any rate: the sector was unjustly sold off in Q1 and all four were available at fire sale prices. I bought shares of MFC at $35 and PWF at $32.

I still think MFC and PWF are very attractively priced and they are my top picks, under $40, given the strength of their balance sheets and solid performnace through difficult market conditions. Expect dividend raises from both. I'd add to either if they weren't already so heavily weighted in my portfolio.
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Post by Tanstaafl »

Now at $37.72 per share. I wonder if it is early or just the right time? This is yielding a fantastic 5.17%.
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Post by investor99 »

I'm curious how others feel about the safety of this dividend?
Current Dividend =$2.05
EPS trailing = $3.42

Stock yielding as much as 6.8% lately.
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Post by brad911 »

As I've shared (with Investor99) I think that Power has their strategic team aggressively assessing the carnage among the wealth management industry for an acquisition.

My guess would be that although the company will suffer fund redemptions, and decreased fees, much of that money may stay with the firm in the form of MMF's or short-term investments as clients simply move out of the market while retaining the same advisor.

They also don't have the same extent of exposure to the guaranteed investment vehicles like the life co's. The dividend, in my view, is safe but this market environment is making a whole new set of rules.
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Post by mpav »

Probably the best asset manager to own - it has parental capital to aquire (or support), closed sales force means they hold on clients better - but at the end of the day this is the typical 1 beta stock...whatever the market does these guys are affected.

Asset under management have collapsed, but for those that do pull out they are hit with a DSC, so that props up the financials for the time being.

I dont personally think the dividend is in jeorpardy, as the payout ratio is aroun 55%, but will they keep a 20% dividend growth rate, highly unlikely.

At the end of the day, with many financials coming to their reporting cycle in the next few weeks, that will be key. Many of us here are using our standard valuation tools on old numbers.....of course the P/E will look good, until this next quarter reports earnings down 50%....then we are back to where we started.
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Post by investor99 »

In the case of IGM though, I don’t care about the P/E or about their potential to grow the dividend by 15% compounded over the next five years. If it is yielding 6.6% now and we can be reasonably certain that they won’t cut the dividend, then I think it is a screaming buy. Why?

This crisis will not last forever, at some point in the future equities will come back in vogue and the masses will get back into mutual funds. Also market values will recover. A 6.6% yield on investment is nothing to sneeze at, especially in these markets. So they have a few lean earnings years, you are still getting your 6.6% while you wait.
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Post by brad911 »

Just going through the quarterly report and the numbers are about what I expected. AUM dropped 4.6% along with revenue & profit. Didn't get a sense of any momentum with all the volatility the past eight weeks, so likely we'll see the full expect in their next report.
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Post by investor99 »

The results were much better than I expected, although the next report will be interesting cosidering a lot of the carnage took place post October 1.
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Post by JaydoubleU »

Funny to look back on the earlier posts on this thread, eh. IGM a buy at $47! Who would've thought.... I agree with 99: their numbers weren't as bad as expected. Next year may be rougher.

I think IGM's dividend should be safe, though growth will have to slow. Because of the structure of the Power companies, there is pressure on IGM and GWO to deliver the dividends to PWF, and on PWF to hand them over to POW,which is why I prefer PWF or POW here.

So, next month we'll see: is it a 5% or a 7% raise for PWF? :)

(Hmm. 2 cents/shr/qrt would mean 6%!)
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Post by investor99 »

Assets Under Mgmt. October 2008 vs. October 2007 were down 14.6%. Not nearly as bad as one might have expected.
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Post by investor99 »

TORONTO, ONTARIO--(Marketwire - May 1, 2009) - IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the first quarter of 2009.

Net income for the three months ended March 31, 2009 was $133.5 million compared to net income of $211.2 million a year ago and adjusted net income of $140.1(1) million in the prior quarter. Earnings per share were 51 cents compared to 79 cents a year ago and compared to adjusted earnings per share of 53(1) cents in the prior quarter.

Gross revenues for the three months ended March 31, 2009 were $559.1 million compared to $714.2 million a year ago and $583.9 million in the prior quarter. Operating expenses were $373.8 million for the first quarter, compared to $424.4 million a year ago and $393.4 million in the prior quarter.

Total assets under management at March 31, 2009 were $98.7 billion. This compared with total assets under management of $119.0 billion at March 31, 2008 and $101.7 billion at December 31, 2008.

Shareholders' equity at March 31, 2009 was $4.2 billion, unchanged from March 31, 2008 and compared to $4.1 billion at December 31, 2008. Return on average common equity for the three months ended March 31, 2009 was 12.9% compared with 20.2% for the same period in 2008 and compared to adjusted return on equity of 13.4% in the prior quarter.
EPS down 35%. Pay out ratio of 100% for the quarter.
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Post by investor99 »

Earnings per share were 55 cents compared to adjusted earnings per share of 81(1) cents a year ago and earnings per share of 51 cents in the prior quarter.

Total assets under management at June 30, 2009 were $109.6 billion. This compared with total assets under management of $119.7 billion at June 30, 2008 and $98.7 billion at March 31, 2009.
People don’t seem to be leaving them in droves; that’s for sure.
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Re: IGM Financial (Symbol-IGM)

Post by Shakespeare »

Nice bump today.
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Re: IGM Financial (Symbol-IGM)

Post by Peculiar_Investor »

Shakespeare wrote:Nice bump today.
Metro (MRU.a) has had a nice bump as well. Here is a possible explanation, see RBC Focus List updates
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Re: IGM Financial (Symbol-IGM)

Post by Shakespeare »

Is "IMG" supposed to be IGM?
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Re: IGM Financial (Symbol-IGM)

Post by Peculiar_Investor »

Shakespeare wrote:Is "IMG" supposed to be IGM?
Oops, not sure. I'm with TDW not RBC and Google doesn't turn up anything yet on the new RBC Focus List. Perhaps someone who has access to RBC can find out.
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Re: IGM Financial (Symbol-IGM)

Post by Shakespeare »

OK, I just checked the list (I rarely bother). IGM is, in fact, on it, not "IMG".
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