Keith Graham Bank of Montreal BMO-T DON'T BUY May 31, 2001

Biggest bank weighting he has. Fits the bill for a long-term buy and hold, collect the dividend. Likes the expansion potential in the US. Some indigestion with BOTW, but kitchen-sinked the last quarter and stock surged. 

A good place to deploy profits from other names.

A much better choice for new money than TD right now.

Possibly the most attractive bank today. Adding recently on its valuation discount. Likes banks with a very strong Canadian position. Trades at 1.2-1.3x book.

Tariffs have spurred a flight to safety, and banks can be a good place to be. Level of resistance going way back to 2022, and the stock decided to fall when it reached that level again. Things happen for a reason, investors have memories.

The question is: How much selling will take place? Not a prediction, but worst-case is pullback to ~$130; a 50% chance or greater that it will do that. A near-term trader like him would probably sell now, get back in later. A long-term, buy-and-hold investor would probably just accept the fluctuation.

Don't buy it today but it has been a great stock to trade. It is the most volatile of the big 5 banks due to the commercial banking component. The stock (not the bank) is more vulnerable to recession.

Among Big 6 in Canada, more exposed to commercial lending. Commercial highs are higher in US, but lows are also higher, than in Canada. Extra credit provisioning is behind them. Likes synergies from Bank of the West. Excellent wealth franchise and growing. Formidable capital markets business is growing quickly. Strong balance sheet. Nice dividend will probably grow.

A good day to buy, despite tariffs.

Looking at the chart, the 50-day MA and the 200-day have converged. It's trying to find support right here, right now. The price doesn't have to fall, the indicators can just soften as the market works through the oversold level. If it doesn't hold, it would certainly be a buy amidst the congestion between $104-130. 

All banks are at risk if economy darkens. But if economic environment is OK, he thinks BMO has the best upside. Most exposure outside the US. Good valuation.

Likes their growth in the US. At the time, he also owned TD, but ditched it when they got in legal trouble with money-laundering before their growth got capped. (He bought RY instead.) BMO has had some integration problems with a western bank, but still likes they have a growth market in the US. Now, all banks are in a funk because of the trade war and a potential consumer slowdown. Doesn't expect big moves up by the banks unless Trump throws in the towel. Long term, this is good, but banks won't soar short term.