Recent Buy – MFC

On June 10th, I added to my existing Manulife Financial holdings at $14.16 (US).  Manulife is a Canadian insurance company which operates in the US under the John Hancock brand.  With this purchase, I was able to reduce my cost basis to $16.17 (US).

Although the price has dropped 24% over the past year, by many measures it’s currently undervalued.  MFC was not on my radar – particularly since it’s an ancillary holding but decided to perform a little research since I had a little money to spend from the completion of the  Baxalta/Shire merger.

What puzzled me most were the financial maneuverings.  Like issuing a REIT in Singapore with US real estate.  Or the US dollar denominated bonds issued in Taiwan.  I don’t think mine were the only concerns based on how the stock has traded.  My conclusion – and I may be wrong – is that MFC is liquidating US assets (via Singapore) due to valuation levels.  The bond offering is probably attractive in Asia in a low or negative interest rate environment.  then moving the proceeds to Canada where their dollar is beginning to strengthen is brilliant – providing it works.  Which is why I bought.

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2 thoughts on “Recent Buy – MFC

  1. Not a bad way to go buying into an insurance company. I like insurance and have CB and AFL in my portfolio with TRV on my watch list. Those MFC maneuverings you mentioned do seem a bit odd but you may be right that it’s looking to offset some U.S. assets in this current environment.

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