Editor's Note: The date that Manulife cut it's dividend has been corrected from an earlier version.
Hi Lou,
Can you decipher what's with MFC as of late - markets are moving up and Manulife is moving down? Is it a good buy and hold? What would be the best entry point? I am aiming for a 3 per cent dividend yield - which means enter when it falls to $17.33 or below if it does continue to fall. Then again, perhaps it's not a good idea to catch a falling knife (albeit a slow one).
Happy Capitalism it is.
David
Hi David,
The simple answer to your question of what has happened to Manulife Financial Corp. is that they have had choppy earnings in the last year and in August of 2009, they cut their dividend in half to $0.13/share. These are not the sorts of events that get investors stoked about buying shares. I would say that MFC is not a buy and hold stock at this point.Your interest in buying in at the $17.33 level does have some merit but you'll have to watch May 6 when MFC reports their Q1 results.
The three year chart paints the picture of a stock that has topped out and is now trading below its 200 and 50 day moving averages and broke below support at $20.oo then $19.50 and then at $19.00. A clear case of falling and not being able to get up. There is support in the $17.50 range, so your entry point of $17.33 could prove interesting.
The six month chart provides a good view of the the current action and the support in the $17.50 range. In addition, you can see the resistance along the 200 day moving average as it bounced off $17.50 in December of 2009. The MACD is still moving lower, so it isn't suggesting a reversal at this time.
If you decide to that you want to buy into MFC before May 6th, you should be watching it like a hawk and digging for every bit of information that you can. I would say that the next four days of trading will provide indicators of the markets expectations of what will be reported by MFC. Current estimates are for earnings per share of $0.50.
MFC has been trading in a down channel since mid March of this year and broke support on the lower boundaryof the channel in late April. I like your target range but go forward with caution to make sure the $17.50 support level holds. It's a matter of confirming the bottom, not anticipating it.
Make it a huge weekend and Happy Capitalism!
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Lou Schizas