Q: IFC: held for quite a while. Stock is down a lot vs highest price. What is going on. Anything to worry about? HOLD, Sell or add to position. I own SLF - very long time and MFC for quite a while in different accounts.
5i Research Answer:
With the prospect of lower rates, we have seen some insurance names decline, as well as rising cost of claims. The insurance industry is also in a 'soft market' right now, where more capital is entering and this is usually associated with margins peaking. The industry as a whole is generally quite defensive and tends to work well in risk-off periods. While it has not been holding well in this recent market decline, we continue to like the insurance industry as a whole over various cycles, and IFC is the leading property and casualty name in Canada, with a history of strong fundamental growth and margins. We would be comfortable holding here for a long-term position.