Bank of America (BAC)

(A Top Pick Nov 22/12. Up 42.18%.) Still trading at 33% discount on its BV. This is still a Buy. Great prospects. They’ve cut their cost structure and got rid of non-core assets.

Sell Bank of America (BAC-N) and Buy Crombie REIT (CRR.UN-T)? As the long-term rates on US government bonds backed up from November of last year by about 1.5% to almost 3% this summer, all interest-rate proxies backed off in price, including REITs. His long-term view is that rates stay range bound 2.5%-3.25%, so the damage has largely been done. Because of this, interest-rate securities can do a little better here and they are. However, in REITs you have to pick your spot and he would prefer industrial REITs that are more economically sensitive with a little better ability to raise rents, as opposed to consumer REITs, which are more consumer driven. Prefers something like Granite REIT (GRT.UN-T) or Pure Industrial (AAR.UN-T), both of which would be more attractive than Crombie. Bank of America is more of a growth oriented story and you will probably get higher dividend growth but a very low base.

This is in the right group. Has been consolidating. Over the next 3 years, you are probably going to see some very good dividend growth and you will see them take some market share. The most recent quarter was held back along with many of the banks because as rates moved higher refinancing of mortgages went down which was a drag on earnings. Cheap.

They are playing catch-up in terms of valuation. Her preference was not to go to the US banks. Lawsuits are an overhang. It will be higher a year from now if we see improvements in economy and US housing. You aren’t getting the dividends and dividend increases in the US like you are in Canada.

If this bank was going to fall over, it would’ve been seized by the regulators before now so it is a relatively safe investment. If you put the money in now, you will be well rewarded over a 3-5 year period.

Any of the banks are sells. He is not ready to buy banks. Any success if coming off cost cuttings. Not a lot of catalysts. Things change but now he would pass on banks. He has a position in Goldman but it has a different metric. Regionals are in fund but underweight.

Wait for $15.78, EBV-3. Model price $16.72, 16.5% upside, but wait until it goes over EBV -3. It could stay under this point for quite some time. It should do well over the long term.

Some of the US banks are quite attractive over the next 2 to 3 years. He looks for rising dividends and thinks the US banks will have an opportunity for accelerated dividend increases. Thinks this is attractive for this reason. In the near term there is some risk in the earnings based on refinancing of mortgages held back because of rising interest rates. Doesn’t think it will last. It is realatively early here.

Has gone through a lot of the turbulence that the rest of the banks have had. Feels the less senior banks, such as this one, offer more upside given a very stable economy but, of course greater reward comes with more risk. Still trading at less than tangible Book. All of these banks are making money on cost cutting because there is really no solid revenue generator for them. Yield curve is fairly flat so they can’t make money off the spread as they traditionally do. It is generally tough time for the banks, but it will always be so.

(A Top Pick October 30/12. Up 54.12%.) These stocks are cheap. Trading below BV. Doesn’t have a big yield but it is buying back stock. Well-capitalized.

Reached a peak at the end of 2010 and another one just recently. It is still in an uptrend. US financials are probably not as strong as Canadian financials. If you are a long-term investor, he would stay with it until it stops going up.

Great play, but all US banks are probably going to have not as good of a Q3 in Q4. Mortgage refinancing activity fell a lot since bond yields went up. Loan origination fell a lot. He took down his 2013 numbers for this by 18%, but left his 2014 numbers intact for a play on housing.

(A Top Pick August 16/12. Up 77.79%.) Thinks this could go to the mid-$30’s. Have to deal with a lot of different lawsuits. Company is profitable and the capitalization ratio is good. At some time he thinks they will increase the dividend but they have to get regulatory approval first. Getting kicked out of the Dow, which means the stock price could come down a bit more, but longer-term it should go up.

This still has balance sheet issues. Stock keeps drifting higher as time goes on with the market hoping that those balance sheet issues are slowly getting behind it. It needs time to heal. Thinks it can drift higher from here.

Cutting back on some jobs in their mortgage area. Mortgage interest rates have increased over the past year, which has resulted in higher mortgage rates. This has resulted in a decline in mortgage activity. She is cautiously optimistic that as the economy slowly improves, return is not going to shoot up sharply in the next year, but will rise slowly.