MFS Investment Management, a unit of Sun Life Financial, might undergo some changes in the future--one of them being a potential sale. The stock price of the Canadian insurance giant might be an indication of what's in store, according to Boston Globe columnist Steven Syre.

Sun Life shares hit their lowest price of the year last month, dragged down by reaction to the company's quarterly financial report and news its president was quitting. Then the stock turned quickly, climbing from $37.35 to nearly $41 in a few weeks, one explanation being that the company was about to make a deal involving MFS, a business it has owned for 24 years.

"The intense speculation on the subject, as well as our observation that management has gone completely silent, leads us to believe that something could be in the works," analyst Mario Mendonca of Genuity Capital Markets wrote in a report last week. The speculation may or may not be true, but some people believe MFS may be merged with another big asset management company sooner or later.

A spokeswoman called MFS a "strategic asset," but added the company didn't rule out "anything that builds greater shareholder value for the future."

MFS manages $168 billion in mutual funds and institutional accounts and will probably make more than $200 million this year and earn an operating profit of more than 25 cents for every dollar of revenue. The numbers are below average for the mutual fund industry.

 

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.