Bank of Montreal (BMO.TO)

This bank +3 of the other for Canadian banks has had a great move to the upside. Wouldn’t Buy at this price.

He views the banks as a proxy for the Canadian economy. As long as you feel good about the Canadian economy, you should do fine on this or any of the other banks. He is Short this one because of a pairs play he is into.

(Market Call Minute.) Not his favourite amongst Canadian banks. They have assets in middle America and he doesn’t think they are the most favourable assets for the recovery.

Pretty close to fully valued. For the next year or two we just go up and down. Just within a trading range.

Let’s assume rates are rising. The common will appreciate better than the preferreds. The feeling is that bank preferreds are overpriced. And this may be true. The housing market and the consumer are both in good shape. Banks benefit from a steepening yield curve. The Harris exposure in the US will benefit them also. He prefers and holds TD, better US exposure.

Banks. Generally he likes them. Selling is far too overdone. It is US hedge funds and speculators. Americans seem to think we are going to have a real estate collapse. He likes the banks. BMO he likes because of the US participation in the mid-west. We might have a concern right now but they are more buys than sells. See Top Picks Today.

Feels the banks are a Buy. This bank typically, has not been the stronger of the group of 6. He would favour National (NA-T) in the smaller banks and, Bank of Nova Scotia (BNS-T) and Toronto Dominion (TD-T) in the larger banks.

He only follows Bank of Nova Scotia (BNS-T) but in terms of valuation of the group in general, dividend payout ratios are very low in the stocks are very, very cheap. Most are increasing their dividends and most are having better credit quality. Asset prices are improving and business is good. Thinks the whole group is great.

This would be his 5^th favourite bank out of the big 5 Cdn banks. Has broken through its 50 day and 200 day support although the sentiment indicator has turned pretty level now. The Cdn banks are pretty good value here. (See Top Picks.)

Bank of Montréal (BMO-T), BMO Covered Call Cdn Banks (ZWB-T) or US banks? Likes Cdn banks better than US banks. Our banks are solidly better quality right across the board. Banks have been weak lately and the index has pulled back to a major support. This one in particular, has pulled back to a level that is quite attractive plus it has a nice yield. However, hanging over the banks is the question of earnings and earnings growth, which is a real problem with this group of stocks.

Feels Cdn banks are cheaper relative to other Cdn dividend payers that are trading at about 11 or 12 times earnings. Their retail business pays their dividend and this business is pretty stable. Even with some of the worries about the housing market, Cdn banks have the top tier of the credit, so will be less impacted if there was a sustained problem in the Cdn housing market, which he doesn’t foresee happening. Dividend of about 4.5% and the growing.

(Market call minute.) Great yield. Earnings were okay. Canadian banks look cheap at these levels.

Has been a little bit range bound at around $62 and is above the upward trend line. Technically, it does not look good if it breaks down through $62. It does have a yield that is fairly high, which is helping it on the downside a little bit.

He prefers exposure in banks through US regional banks. Canadian banks offer attractive dividends and if you are looking for yield in your portfolio, this is typically been a big component of that. Canadian economy has a greater exposure of GDP through housing than the US had at the peak of their housing market. Believes that housing prices will go lower before they go higher. We are heavily levered as a country on a personal level, which will impact consumer spending and consumer loan growth for the banks.

Of all the banks, this is probably his least favourite because it has a relatively high PE and low relative profitability.