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I continue to track my favorite single stock that I STILL do not own. Tonight, it has fallen enough for Morningstar to rate it at a "4-star" price, carrying an -18% discount to NAV. Salivating. I have decided that I really really really MUST build a separate position in CASH.
@Crash: May I ask why you like it so much? I have actually owned a small piece of it recently, but let it go as it was too small to be worth it (I was going to build a position), and it seems like the Canadian banks, though “high yield,” don’t grow their dividends very much every year. I could be wrong though (it’s been known to happen...only A LOT lol)
@Graust I have lived in Canada, and visit every year. CIBC is one of the Big Six. Together, they own 90% of deposits in Canada. I'm not so worried about GROWING dividends. It is already a "cash cow." I like its discount to NAV, as shown in its share price, currently. Canadian banks are HIGHLY regulated, but/and they are very "sticky:" Canada's depositors don't have the gazillions of choices we do in the States when it comes to banking. Yes, there are credit unions, but their portion is 10% of the money on deposits. .....CIBC is potentially vulnerable because it holds a great deal, maybe the majority--- of "uninsured" mortgages in Canada. (per Morningstar.) I'm not sure I understand that, since here in The States, mortgage lenders insist on home insurance in order to obtain a mortgage in the first place. Morningstar rates the CM fair-value price at $93.00 US. Tonight it's at $77.46. A website called "Simply Wall Street" tonight says that CM is trading at a -38.7% discount. The same website says CM is liable to grow dividends at 2.8% per year, and "already pays a high and reliable dividend of 5.63%." The same website asserts that using its own risk metrics, "there are no risks detected."
"There has been no significant price volatility is the past three months..." Further comparisons are made, but it's a mismatch: statistical comparisons offered are against the USA banking industry. "Simply Wall Street" uses a specific notation to show that, in their opinion, Stock X is trading "below market value." There is a separate, additional distinction noted when Stock X is trading "significantly" below NAV. CM has them both covered. The P/E is just 9.2. PEG is less wonderful, but still good. The P/B is being compared to US banks on that webpage, and CM comes in at 1.3, vs. the US industry avg. of 1.1.... And take a look at the Analysts' Future Growth Forecast!
Just be sure, when you look at the stock, whether you're looking at Toronto (TSX) or NYSE numbers. The current currency exchange advantage with the US dollar is .33 cents.
Bank of Nova Scotia has been on my radar, too. "Scotiabank" is already maybe the most INTERNATIONAL bank out of Canada. Check it out, too. To use "Simply Wall Street," they want your email. I started a junk-email account for the times when I run into that shit. Then you'll choose a password. They will give you 10 (ten) "free looks" at 10 different stocks. Ya wanna pay, they'll give you a better deal.
When I finally DO buy CM, it will be for life. Timing is everything, with a single stock. I won't buy it at a premium, of course.
Wow. Thanks, Crash! I was going to slowly build positions in CM, BMO, and one other....but got distracted by a “SQUIRREL!” and sold them and bought something else.
I was still curious about your thinking....thanks for sharing, @Crash!
I think Canada is under-owner by US investors, and I think there are possibly some monopolies to be found there....I own BCE and ENB (though the latter has large US holdings, but still a Canadian company). Many of the stocks there seem “yieldy” (if that’s a word). An oversimplification, no doubt. Haha
@Crash - you said "CIBC is potentially vulnerable because it holds a great deal, maybe the majority--- of "uninsured" mortgages in Canada. (per Morningstar.) I'm not sure I understand that, since here in The States, mortgage lenders insist on home insurance in order to obtain a mortgage in the first place."
Maybe I'm not following you correctly but there is a BIG difference between an uninsured 'mortgage' and an uninsured 'home.' You're talking about two different things there. An insurance company might insure a million dollar home but it might not insure a million dollar loan.
I wonder if that means the mortgages don't have PMI, Private Mortgage Insurance. PMI may suggest owners have less equity invested in the home and can more easily walk away from the mortgage. Just a guess.
Comments
"There has been no significant price volatility is the past three months..." Further comparisons are made, but it's a mismatch: statistical comparisons offered are against the USA banking industry. "Simply Wall Street" uses a specific notation to show that, in their opinion, Stock X is trading "below market value." There is a separate, additional distinction noted when Stock X is trading "significantly" below NAV. CM has them both covered. The P/E is just 9.2. PEG is less wonderful, but still good. The P/B is being compared to US banks on that webpage, and CM comes in at 1.3, vs. the US industry avg. of 1.1.... And take a look at the Analysts' Future Growth Forecast!
Just be sure, when you look at the stock, whether you're looking at Toronto (TSX) or NYSE numbers. The current currency exchange advantage with the US dollar is .33 cents.
CIBC and Bank of Montreal are both trying to build their presence in the USA, making use of US bank names. (Harris Bank= BMO.)
https://business.financialpost.com/news/fp-street/cibc-agrees-to-buy-milwaukee-boutique-bank-cleary-gull
https://www.reuters.com/article/us-americancentury/cibc-expands-u-s-presence-with-american-century-deal-idUSTRE76E48D20110715
https://en.wikipedia.org/wiki/CIBC_Bank_USA
Bank of Nova Scotia has been on my radar, too. "Scotiabank" is already maybe the most INTERNATIONAL bank out of Canada. Check it out, too. To use "Simply Wall Street," they want your email. I started a junk-email account for the times when I run into that shit. Then you'll choose a password. They will give you 10 (ten) "free looks" at 10 different stocks. Ya wanna pay, they'll give you a better deal.
When I finally DO buy CM, it will be for life. Timing is everything, with a single stock. I won't buy it at a premium, of course.
I think Canada is under-owner by US investors, and I think there are possibly some monopolies to be found there....I own BCE and ENB (though the latter has large US holdings, but still a Canadian company). Many of the stocks there seem “yieldy” (if that’s a word). An oversimplification, no doubt. Haha
Maybe I'm not following you correctly but there is a BIG difference between an uninsured 'mortgage' and an uninsured 'home.' You're talking about two different things there. An insurance company might insure a million dollar home but it might not insure a million dollar loan.