Michael Sprung’s Top Stock Picks on BNN Bloomberg Market Call, July 16, 2018

Outlook:

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MARKET CALL: Michael Sprung’s Top Picks: July 16, 2018

Until recently, markets shrugged off political and geopolitical developments. However, investors were shaken in the latter part of the second quarter as tensions intensified regarding global trade in reaction to a series of tariffs and counter tariffs that were enacted. Global stock market volatility increased as investors exited positions in June and markets lost some of the gains that had been achieved earlier. It is becoming increasingly apparent that the US is no longer going to accept what it views as asymmetrical trade and military alliances as the status quo. This state of affairs has enormous implications for the US and its trading partners. Corporate profits would be severely impacted by a prolonged trade war.

In this environment, We would advise caution. Value rather than momentum will become more important in stock selection as investors seek to minimize risk on the downside. Investors should continue to seek well financed, well managed companies that are selling at attractive price levels.

Top Picks:

Manulife Financial Corporation, MFC-T, Owned personally and by clients, Last Purchase May 2, 2018 $23.47
Manulife is a leading Canadian-based financial services group with operations in Asia, Canada and the United States. The company is well positioned in Asia where they are experiencing high growth and profitability; 50% of Manulife’s core earnings stem from Asia. Under Roy Gori’s leadership, a new round of balance sheet optimization is underway emphasizing a more agressive approach to dealing with less profitable legacy businesses. Manulife has been lagging its peers recently, likely a result of some anticipated charges during this restructuring period. However, we anticipate that Manulife will benefit from rising rates, a flattening of the yeild curve and stronger results from Asia and Wealth Management. A renewed emphasis of cost efficiencies will improve margins over the next few years. The current yield of 3.7% is attractive.

ARC Resouces Ltd., ARX-T, owned by clients, Last Purchase March 9, 2016 $18.72
ARC in one of Canada’s leading conventional oil and gas companies with operations in Western Canada. Management is focused on the development of ARC’s high-quality long-life assets. Liquids rich opportunities in the Montney offer the prospect of higher margins. The expansion at Dawson Phase III was completed in mid-2017. Future growth in production will arise from completion of projects in Sunrise (mid-2019) and Dawson Phase IV in 2020. Arc has one of the strongest balance sheets amonst its peers with net debt to cash flow below 1.5X. The stock currently yields 4.1%.

Fortis Inc., FTS-T, Owned by clients, Last Purchase May 2, 2018 $42.45
Fortis is the largest investor owned gas and electric distribution utility in Canada with operations in the US and Belize. Over the next few years, Fortis is expected to significantly increase its rate base. Over the next five years, management anticipates capital expenditures in the order of $12.9 billion. The company is extremely well diversified by asset type, geographic location and regulatory regimes. Going forward, management’s focus is anticipated to be more on organic growth within its exisiting markets as opposed to M&A. Fortis has a history of dividend increases that are expected to continue. The stock currently yields 4.0%.

You can view the complete interview here>>

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

TSX Stock Picks & Outlook – Michael Sprung on BNN Market Call Tonight

TSX Stock Picks

Manulife Financial Corp, MFC-T, Owned personally and by clients, Last Purchase March 3, 2016, $18.50

Manulife is a leading Canadian-based financial services group with operations in Asia, Canada and the United States. Over the past five years, the company has made tremendous strides in de-risking the balance sheet and improving profitability through increasing wealth management operations as well as redirecting the mix of products sold. Manulife's geographic diversification in an era of expected interest rate increases, positions the company to do well and raises the prospect of future dividend increases. The stock currently yields around 3.0%.

TSX Stock Picks Outlook - Michael Sprung on BNN Market Call Tonight

TSX Stock Picks & Outlook – Michael Sprung on BNN Market Call Tonight

AGT Food and Ingredients Inc., AGT-T, Owned personally and by clients, Last Purchase December 18, 2014, $26.50

AGT is a leader in pulse processing for export and domestic markets.  The company has had notable success in diversifying into food ingredients, an area that is facing increasing global demand.  2016 was demonstrative of the growing global demand for pulses. In 2017, AGT will be in a position to expand its ingredients and food shipments as additional capacity comes on-stream and the recently expanded pasta business in Turkey develops. 

Fortis Inc., FTS-T, Owned by clients, Last Purchase April 12, 2016, $39.41

Fortis is the largest investor owned gas and electric distribution utility in Canada with operations in the US and Belize.  Over the next few years, Fortis is expected to significantly increase its rate base. Over the next five years, management anticipates capital expenditures in the order of $12.9 billion. The company is extremely well diversified by asset type, geographic location and regulatory regimes. Fortis has a history of dividend increases that are expected to continue. The stock currently yields 3.9%.

Outlook:

2016 was a year full of surprises. Following a terrible start in early January to mid-February, markets recovered. Several major events failed to go the way of "expert" prediction; most notably the vote in the UK to leave the European Union (Brexit) and the election of Donald Trump as the 45th President of the United States of America. In both of these occasions, initially markets reacted as the experts predicted but then they changed course and rallied in very short order.While all of this was happening, the European migrant crisis persisted, spurring more radical political movements. The underlying financial problems within the European Union linger, inflaming the rhetoric of politicians competing for headlines. A disturbing trend from investors' point of view is the rising sentiment against free-trade and globilization.

There is no shortage of other global geopolitical concerns in the Middle East (particularly Syria), the South China Sea, Russian interventions in the Ukraine and Syria, etc. 

As we start 2017, we will carry all of this baggage forward. Already, new shocks have emanated from the first weeks of the Trump presidency and many more, yet unknown surprises are sure to follow. The US economy continues to expand and interest rate increases are anticipated as a result. Technology continues to influence productivity and labour markets. 

There will be winners and losers in this trend, but change is inevitable. 2016 is still fresh in our minds. 2017 will bring its own shocks and surprises. Investors will prosper if they stay fast with their discipline and do not get distracted by the turbulence that surrounds them. 

You can view the complete interview here>>

Do you own mutual funds? How did your advisor choose the funds you hold & how much are you paying? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.  

Manulife Financial second-quarter net income “lower than expected”

Manulife Financial Corp.(TSE:MFC, Mkt cap 45.32B, P/E 14.99, Div/yield 0.17/2.96, EPS 1.53, Shares 1.97B) has seen its second-quarter net income decline by some 36%, but the reported earnings were in line with analysts’ expectations, who had accounted for the impact of rising interest rates.

Stockwatch Manulife Financial second quarter net income lower than expected

Stockwatch – Manulife Financial second-quarter net income “lower than expected”

As the Financial Post reports, Canada’s largest insurer announced that net income for the second three months of the year came in at $600 million, or 29 cents a share. Profit excluding some items was 44 cents a share, as the 13 analysts surveyed by Bloomberg had predicted.

In a statement, the firm’s chief executive officer Donald Guloien highlighted its progress in wealth management and life insurance but acknowledged that changes in interest rates caused net income to dip to lower than anticipated.

An obvious explanation for the decline comes in the shape of a $362 million hit the firm had to absorb when its accounting assumptions were negatively impacted by a steepening yield curve, primarily in the U.S.

Chief financial officer Steve Roder added that the firm has not been helped by the fact that the value of instruments in Manulife’s interest-rate swap program is dependent on interest rates.

As the FP explains, higher interest rates typically benefit insurers as time goes on, since they drive up bond returns and the assets used against policy guarantees, whereas lower rates see those returns contract.

When the impact of interest rates is taken out, core earnings increased to $902 million, according to financial documents.

“Our strong core earnings demonstrate our continued execution on the key drivers of earnings growth: increasing scale in our wealth and asset management businesses, generating strong insurance growth in Asia, and delivering on our Efficiency & Effectiveness initiative,” Roder said.

Manulife Financial Corporation is a Canadian life insurance company. It is the holding company of The Manufacturers Life Insurance Company (MLI) and John Hancock Reassurance Company Ltd. (JHRECO). Manulife is a financial services company with principal operations in Asia, Canada and the United States.

Manulife Financial’s divisions include:

  • Protection (Asia, Canadian and U.S. Divisions);
  • Wealth Management (Asia, Canadian and U.S. Divisions);
  • Corporate and Other segment.

The Company provides financial protection and wealth management products and services to personal and business clients. It also offers asset management services to institutional customers. The Company operates as Manulife in Canada and Asia and primarily as John Hancock in the United States.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that the success of a particular investment is always relative to the price you paid. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Manulife Financial Bank seeks growth with 830 new ATMs

Manulife Financial Corp.‘s (TSE:MFC, Mkt cap 45.92B,P/E 13.47, Div/yield 0.17/2.92, EPS 1.73, Shares 1.97B) banking subsidiary has announced it will install around 830 new automated teller machines in convenience stores across Canada as it strives to take a bigger share of the country’s retail banking market.

Stockwatch Manulife Financial Bank growth 830 new ATMs

Stockwatch – Manulife Financial Bank seeks growth with 830 new ATMs

As the Wall Street Journal reports, Manulife Bank of Canada has already begun installing the machines, which will be added to a Canadian ATM network called the Exchange Network.

The Exchange Network, which supplies machines to a host of banks and credit unions across Canada, comprises only 11 Manulife-specific automatic banking machines (ABMs) at present.

However, the move by Manulife Bank to bolster its physical presence will see the Toronto-based firm take a more impressive proportion of the Exchange Network, which allows customers of its member bank and credit unions to make surcharge-free withdrawals, deposits or PIN changes.

“This is all about offering convenient banking near where our customers live and work,” said Rick Lunny, president and chief executive of Manulife Bank.

Customers will soon see Manulife machines in Mac’s, Couche-Tard and Circle K convenience stores in Newfoundland, New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia and the Northwest Territories.

The installation process is expected to be completed by September, a Manulife spokeswoman said.

Andrew Obee, president & CEO of FICANEX Services, which runs the Exchange Network, said he was “thrilled” with the addition of Manulife Bank’s ABMs to the network, adding that they will bring its total number of machines to more than 3,300.

Interac continues to be the dominant network in Canada, however, with some 65,000 machines having been installed across the country.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Manulife Financial signals its intent with three new hires

Manulife Financial Corp. (TSE:MFC, Mkt cap 45.92B,P/E 13.47, Div/yield 0.17/2.92, EPS 1.73, Shares 1.97B) has welcomed the arrival of three new C-suite executives to its private asset management business, as it presses ahead with expanding its commercial property strategy.

Canada StockwatchManulife grow private asset management business

Canada Stockwatch – Manulife signals its intent to grow its private asset management business.

According to Bloomberg’s report, Jenn Lundmark is the most notable appointment of the three arrivals, having been named head of real estate fundraising at Manulife Asset Management’s private markets unit.

Lundmark is joined by Sahezad Pardhan, hired as global chief financial officer for the operation, and Ken Pogrin, who takes up the roles of global head of business development and chief operating officer.

The appointments will aid Manulife in its ambitions of “growing our private asset management business significantly over the next five years,” Kevin Adolphe, head of the private markets business and real estate, said in a statement.

Having set up the private markets unit in 2013 in order to help generate fee income, Manulife is now looking to push this area of business forwards by adding institutional clients.

As at March 31, 2015, Canada’s largest insurer said its assets under management in private asset classes were C$98 billion (US$77 billion), including assets managed by and for Manulife’s general fund and external clients.

Lundmark will be tasked with raising capital for real estate investments. She joined from American Realty Advisors in Chicago, and prior to that she worked at Goldman Sachs Group Inc. American Realty declined Bloomberg’s request for a comment on the switch.

Meanwhile, Pardhan will focus on expanding third-party capital having made the move from Oxford Properties Group, the real estate arm of Ontario’s Omers pension fund.

“We are pleased to announce these key hires, rounding out our senior management team,” said Adolphe. “Since the launch of Private Markets a year and a half ago, we have experienced good traction in the marketplace, laying the foundation for the growth of our business.”

Manulife Financial Corporation is a Canadian life insurance company. It is the holding company of The Manufacturers Life Insurance Company (MLI) and John Hancock Reassurance Company Ltd. (JHRECO). Manulife is a financial services company with principal operations in Asia, Canada and the United States.

Manulife Financial’s divisions include:

  • Protection (Asia, Canadian and U.S. Divisions);
  • Wealth Management (Asia, Canadian and U.S. Divisions);
  • Corporate and Other segment.

The Company provides financial protection and wealth management products and services to personal and business clients. It also offers asset management services to institutional customers. The Company operates as Manulife in Canada and Asia and primarily as John Hancock in the United States.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Canada Stockwatch – Manulife To Continue With Growth Drive In Spite Of Profit Decline

Canada Stockwatch – Manulife Financial Corp. (TSE:MFC, Mkt cap 45.57B, P/E 12.89, Div/yield 0.17/2.94, EPS 1.79, Shares 1.97B) has said it will continue to seek out acquisition and partnership opportunities, despite reporting a lower profit in the first quarter, Reuters reports.

Canada StockwatchManulife acquisition partnership opportunities

Canada Stockwatch – Manulife will continue to seek out acquisition and partnership opportunities.

Since the turn of the year, Manulife, Canada’s largest insurer, has signalled its intent to expand its reach with a number of major investments, including a near $4 billion deal for the Canadian operations of the British insurer Standard Life.

It has also acquired New York Life Insurance Co’s retirement services business, while a $1.2 billion deal with Singapore’s DBS Group Holdings Ltd for a 15-year partnership will allow it to make a name for itself in Asia.

While the deals have prompted a rise in assets under management to $821 billion, they appear have taken a toll on its bottom line with net profit falling to $723 million, or 36 cents a share, in the quarter ended March 31, compared with $818 million, or 42 cents a share, 12 months ago.

However, the Toronto-based company still managed to raise its quarterly dividend, which chief financial officer Steve Roder said reflects a “very strong year”.

“We will continue to look at opportunities that may be available if they match the interests of our shareholders to provide core earnings growth over the medium term,” Roder added in an interview.

Core profit, meanwhile, increased to 39 cents a share, from 37 cents a share a year earlier.

Analysts, on average, had forecast earnings of 42 cents per share, according to Thomson Reuters I/B/E/S.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe clients are more concerned about losing money than making speculative gains.

Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

Michael Sprung on BNN’s Market Call Tonight, April 28, 2015

Market Call Tonight – each weekday evening, Mark Bunting hosts top fund managers and market analysts – professionals who manage retail and institutional investment assets.

Market Call -Top Picks Michael Sprung Manulife Financial AGT Food Ingredients New Flyer Industries

Market Call – Top Picks from Michael Sprung: Manulife Financial, AGT Food and Ingredients, and New Flyer Industries

Market Call Outlook:

Global stock markets continue to advance despite investors’ concerns with respect to geopolitical turmoil in Asia, the Middle East and Eastern Europe.  Since the financial crisis in 2008, total global debt has increased by over 40%, or $57 trillion.  This massive increase in debt has been a consequence of the low interest rate environment and various programs of quantitative easing by a number of central banks.  In Canada, consumer debt levels have been highlighted as a concern by government officials and the fallout of lower energy prices continues to reverberate through the economy.  Advancing markets have resulted in higher valuation levels.  Investors should be cautious in this environment but be prepared to take advantage of any pullbacks in the market.

Market Call Top Picks:

Manulife Financial Corp. (TSE:MFC, Mkt cap 43.48B, P/E 12.30, Div/yield 0.16/2.81, EPS 1.79, Shares 1.97B) Owned personally and by clients, Last Purchase: Dec 24 2014 $22.18

Manulife is a leading Canadian-based financial services group with operations in Asia, Canada and the United States.  Over the past five years, the company has made tremendous strides in de-risking the balance sheet and improving profitability through increasing wealth management operations as well as redirecting the mix of products sold.  The insurance companies will be amongst the beneficiaries should interest rates start to rise.  MFC has one of the strongest capital bases in the industry.  Going forward, we anticipate that core earnings growth will continue to stem from the Asian operations as well as from initiatives in the US and Canada.  With its strong capital base and improving profitability, dividend increases are likely within the next few quarters.  Manulife will be reporting earnings on May 7.

Read all of our reports on Manulife here>>

AGT Food and Ingredients Inc. (TSE:AGT, Mkt cap 598.21M, P/E 26.20, Div/yield 0.15/2.31, EPS 0.99, Shares 23.07M) Last Purchase Dec 18 2014 $26.50

AGT is a leader in pulse processing for export and domestic markets.  The company has had notable success in diversifying into food ingredients, an area that is facing increasing global demand.  2016 has been declared by the United Nations to be the International Year of the Pulse.  This designation will serve to highlight the opportunities for AGT as demand for pulse ingredients expands.

Read all of our reports on AGT Food and Ingredients here>>

New Flyer Industries Inc (TSE:NFI, Mkt cap 784.31M, P/E 24.95, Div/yield -/4.20, EPS 0.56, Shares 55.51M) Owned by clients, Last Purchase: Dec 18 2014 $12.80

New Flyer Industries manufactures and assembles transit buses in Canada and the US as well as providing after market services.  The company has been a consolidator in North America and is well positioned to participate in fleet renewals.  Pricing has been improving and the Company’s backlog has been expanding.  New Flyer will be a beneficiary of the improving economy in the US and the strong US dollar as about 80% of their revenues stem from the US

Read all of our reports on New Flyer here>>

See Top Picks from Michael Sprung: Manulife Financial, AGT Food and Ingredients, and New Flyer Industries on the Market Call Tonight page.

Market Call Top Pick Sales:

Agrium Inc. (TSE:AGU, Mkt cap 17.97B, P/E 18.77, Div/yield 0.98/3.12, EPS 6.71, Shares 143.74M) We scaled back holdings in a number of accounts where weight had become larger than desired due to recent price appreciation.  Still owned in many accounts.Sold at $143.12 on February 24, 2015. View previous reports here>>

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe successful investors must challenge the market consensus by maintaining an independent point of view.

Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Canada Stockwatch – Manulife Reveals Plans To Cut Property Bill By 25%

Canada Stockwatch – Insurer Manulife Financial Corp. (TSE:MFC, Mkt cap 43.52B, P/E 12.31, Div/yield 0.16/2.81, EPS 1.79, Shares 1.97B) revealed recently that it will reduce its property bill by up to 25 percent with renovations and new offices in cities that include Montreal, Toronto and Hong Kong.

Canada Stockwatch Manulife Plans Cut Property Bill 25%

Canada Stockwatch – Manulife Reveals Plans To Cut Property Bill By 25%

With office prices surging and advances in technology allowing staff freedom from traditional cubicles, many companies are reducing the significant costs associated with real estate. By 2017, Manulife’s major offices will have unassigned desks and modern layouts, and offer flexible schedules that will allow a third of its Canadian employees the opportunity to work remotely.

In the past, staff promotions often led to the construction of new offices – and the bills associated with it. Now, Manulife plans to generate rental income in its buildings by leasing out the space that was previously taken up by unused desks and office furniture. For example, about a third of the company’s buildings in Toronto (comprising 1 million square feet) will now be leased to other firms, such as luxury watch maker Breitling.

If Manulife achieves its target of 300,000 square feet, the company could receive around C$11.3 million per year in rental fees from in its Toronto property alone. According to commercial real estate brokers Cushman & Wakefield, the average office rent in midtown Toronto is C$37.67 per square foot.

With approximately 29,000 employees around the world, Manulife also hopes to make cost savings by consolidating staff. The most significant move will be that of the employees based over six floors in a tower on Queen St. East to its recently revamped midtown offices.

Many other financial firms have recently revealed similar plans, including MetLife Inc. and Deloitte LLP.

Kevin Adolphe, head of real estate and Manulife Asset Management’s private markets unit, admits that the motivation for the changes was originally about savings but said the company quickly realized that it would also see “substantial benefits that we can’t really measure perfectly.” This includes productivity, staff engagement, and less employee turnover.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that clients gain from our focus on the long-term fundamentals and not chasing short-term trends.

Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.