IGM Financial (Symbol-IGM)

[investor99]

I bought half a position now and I'm going to buy the other half later if I get a chance to

[yielder]

On Jan 3rd IGM reported sales and assets under management. Investors obviously didn’t like what they saw as they have been dumping the stock ever since.

Perhaps.

[boib22]

Look at the compitition. AGF and CI.

They are down but not like IGM

[investor99]

http://www.globeinvestor.com/servlet/st ... L/GIStory/

[investor99]

http://www.globeinvestor.com/servlet/Wi ... =RBELL09-3

[andyt]

On Jan 4th, I posted the following here, based on information from

http://www.dividendgrowth.org/DivReport ... 123106.pdf

"IGMs 10 year Highest Yield is 2.50%, 10 Year Lowest 1.50% and 10 Year Average 2.00%. Toaday's yield is 3.28%, 0.78% above it's 10 Year Highest Yield".

investor99 challenged my information, so:

"I checked IGM at fpinfomart and they show a 2003 dividend of 0.99 with a stock price high of $32.00 and a low of $23.60, yielding 4.20%".

I am at a loss to explain the discrepancy, could someone please help with this. What am I missing?

Thanks
andyt

[investor99]

Your link does not work for me.

[yielder]

"IGMs 10 year Highest Yield is 2.50%, 10 Year Lowest 1.50% and 10 Year Average 2.00%. Toaday's yield is 3.28%, 0.78% above it's 10 Year Highest Yield".

I've fixed the source: Hi=3.30 Lo=2.50 Avg=2.90 based on the table I included up thread. This isn't an exact science which means that I arbitrarily fiddle with data if I'm so inclined. I tend to exclude apparent outliers which is why the Hi, Lo, Avg here don't match the Hi,Lo, Avg in the table up thread.

Apologies for any inconvenience caused.

[andyt]

Yielder

Thanks for the clarification but I am still somewhat confused (this happens) by the following"

"I checked IGM at fpinfomart and they show a 2003 dividend of 0.99 with a stock price high of $32.00 and a low of $23.60, yielding 4.20%".

Your updated information shows a Hi=3.30%, a discrepancy of 0.9%. Perhaps I am mistaken in assuming that at the low of $23.60, IGM paid a dividend of 0.99?

Thanks
andyt

[yielder]

Yielder

Thanks for the clarification but I am still somewhat confused (this happens) by the following"

"I checked IGM at fpinfomart and they show a 2003 dividend of 0.99 with a stock price high of $32.00 and a low of $23.60, yielding 4.20%".

Your updated information shows a Hi=3.30%, a discrepancy of 0.9%. Perhaps I am mistaken in assuming that at the low of $23.60, IGM paid a dividend of 0.99?

Thanks
andyt

I use a 10 year average to derive my high, low, and average yield. I arbitrarily exclude outliers if I think they might be distorting the average.

[investor99]

Not a bad rebound off of ~$46.00.....to $49.15. In a way I wish it had stayed lower to enable me to buy more.

[Bylo Selhi]

Another reinforcement of why it's better to buy the fundco than the fund. Seven interesting mutual fund tidbits

$291,117,000
That's the sum of the various operational fees and the reported management fee paid by Investors Dividend for the fiscal year 2006. The fund's management-expense ratio, which is in the neighbourhood of 2.8% of assets depending on the series, accounted for 80% of the fund's total expenses. To illustrate how large this sum of money is, more than three-quarters of the funds in Morningstar Canada's database don't even have assets under management that high. It surprises us that with Investors Group's massive asset base, and considering that Investors Dividend is the largest mutual fund in Canada (with over $13 billion in assets), the firm doesn't pass more of the savings from the economies of scale to unitholders.

[zaman]

Currently yielding 3.6%, based on yield, this seems like a buy. Although I wonder if a bit more volatility might lower the price some more. In volatile times like this I wonder if IG's share price may get over punished. Any thoughts?

[yielder]

Currently yielding 3.6%, based on yield, this seems like a buy. Although I wonder if a bit more volatility might lower the price some more. In volatile times like this I wonder if IG's share price may get over punished. Any thoughts?

How sustainable is the dividend/dividend growth if AUM shrink because of market price declines and/or redemptions?

Disclosure: I have a position. This is not a recommendation to buy or sell. People should do their own research and make their own decisions, ie, I'm not responsible for what you do.

[investor99]

I don't think it is a 'buy' currently. The stock has come off for good reason IMO. There is going to be a lot of redemption activity reflected in their next earnings report.

I've always thought this would be a good one to add to when the market tanks severely. Reason being they will suffer redemption and value losses in their funds and assets. All the doom and gloom will make many people sell and leave the market. Long term, I believe IGM will do very well, however I agree that their dividend growth rate will suffer seriously in a major downturn of the market.

To me this is a stock that you buy in a bear market hold in a bull market.

[Arby]

There is going to be a lot of redemption activity reflected in their next earnings report.

Do you have any facts to support that statement? According to my reading of IGM's press releases, their latest AUM is less than 1% lower than the previous quarter, so it doen't appear there's been "a lot of redemption activity" since their last quarterly report.

[AltaRed]

There is going to be a lot of redemption activity reflected in their next earnings report.

Do you have any facts to support that statement? According to my reading of IGM's press releases, their latest AUM is less than 1% lower than the previous quarter, so it doen't appear there's been "a lot of redemption activity" since their last quarterly report.

Norman Levine said the same thing about CI Financial yesterday on BNN... if you believe anything any of the BNN guests ever say about any stock at any time. He advised waiting because of reductions in AUM due to current market volatility.

[JungleGuy]

What’s surprising is that the IGM stock languished while building up to the tech bubble peak, but flourished after the bubble popped. Judging from the consistent dividend growth over the past 10 years, it’ll take something bigger than a tech bubble to knock this cow over.

[investor99]

By Sean B. Pasternak

Sept. 5 (Bloomberg) -- Royal Bank of Canada and IGM Financial Inc. had net mutual-fund redemptions last month after a global credit crunch prompted Canadian investors to sell money-market funds.

Royal Bank, the country's largest lender, had redemptions of C$64 million ($61 million), according to a statement today. It was the first monthly decline in three years for the Toronto- based bank, according to the Investment Funds Institute of Canada.

Winnipeg, Manitoba-based IGM Financial, the largest fund company, had net withdrawals of C$144.7 million. CI Financial Income Fund, the second-largest, said it had net redemptions of C$137 million.

Investors shunned money-market funds last month after the market for asset-backed commercial paper issued by non-bank dealers seized up on concern the funds may have investments linked to U.S. subprime mortgages.

..perhaps I shouldn't have used the terms 'a lot', however redemptions are never a good thing.

disclosure - I own IGM shares.

[JungleGuy]

I read a report that IGM was diversifying into the financial planning space to lighten their reliant on MER. Wonder how that's going.

Maybe not so much money market fund, but if more investors do decide to pull out of their equity funds, IGM should benefit from the deferred sales charge.

Disclosure: IGM is my largest holding, although I'm indifferent whether the stock goes up or down.

[yielder]

By Sean B. Pasternak

Sept. 5 (Bloomberg) -- Royal Bank of Canada and IGM Financial Inc. had net mutual-fund redemptions last month after a global credit crunch prompted Canadian investors to sell money-market funds.

Well, I sold all of my Mackenzie Cash Management fund until I was able to determine what was in the portfolio. Once I knew, I bought re-established the holding. I wouldn't be surprised to see a surge in money-market fund subscriptions this month. MMF's don't make fundco's much money between the relatively low MERs and high shareholder servicing costs that result from revolving door subscription/redemption activity.

[investor99]

Earnings up 14%, sales up 14%, total assets under mgmt. up 12.5% ROE up 0.5%....record low redemption rates at Investors Group

[bubbalouie]

According to FPinfomart, the historical roes have been:

2006 2005 2004
21.39% 20.7% 19.85%

It looks like they're on track for a 22+% ROE this year.

The p/e is around 15.9. Any cheaper and I would definitely be interested.

[bubbalouie]

Now that it's under $50, I am very tempted but it's still trading at a p/e of 15. The stock is under the 50 and 200dma.

Do they have any exposure to real estate or ABCP?

[investor99]

Not that cheap yet, IMO. $47 would be lovely.