Manulife (MFC)

Max Sat Nov 20, 2010 12:21 pm

RETROSPECTIVE ANALYSIS

This was the follow up to BP. The stock was already at my estimate of book value at approx $13.50, so there was little doubt that it was undervalued. I liked the overall business, and found in the financial statements that most of the losses from the previous quarter that had caused the crash in stock price were related to accounting write downs (non-cash), which I expected to stabilize or recover. Regardless, when a stock is selling below book value, there is a pretty good chance you will get your money back even if the business shuts down.

Here is the trading history.

Buy	Aug 11/2010	200	13.39
Buy	Aug 11/2010	200	13.16
Buy	Aug 13/2010	200	12.90
Buy	Aug 13/2010	200	12.65
Buy	Aug 13/2010	200	12.35
Buy	Aug 24/2010	200	11.95
Buy	Aug 24/2010	200	11.37
Sell	Sep 03/2010	1400	13.30
-
Buy	Sep 08/2010	200	13.06
Sell	Sep 10/2010	200	13.28
-
Buy	Sep 15/2010	200	13.22
Buy	Sep 17/2010	200	12.95
Sell	Sep 20/2010	400	13.31
-
Dividend	Sep 22/2010	NA	NA	78
-
Buy	Sep 22/2010	6	12.86
Buy	Sep 22/2010	200	13.14
Buy	Sep 22/2010	200	12.80
Buy	Sep 23/2010	200	12.56
Buy	Oct 6/2010	200	12.65
Buy	Oct 7/2010	200	12.45
Buy	Oct 14/2010	200	12.35
Sell	Nov 4/2010	1206	13.70

In this case, I was a lot more disciplined. I could see that the stock had been a lot lower during the 2008 crash, so I was much more strict about my increments and price targets. I traded the stock a number of times as it rose back up before I accumulated enough shares. Currently the stock is at $15 - $16, so it shows that I sold much too early. Considering that they are still losing money, this is currently a fair price, but I think there may be another opportunity in the future to buy this stock.

Total profit = $2,387.09 (including $78 dividend, commissions, etc). % Gain = 6%. Average # days held = 21 days. Annual % gain = 100%.

Risk = Very low.