Bank of Nova Scotia (BNS.TO)

Has tremendous reach and scale in Latin America and South America. In Mexico they are one of the dominant banking franchises.

(A Top Pick Sept 1/15. Up 23.5%.) He still likes this. Canadian banks are a lot stronger than people generally give them credit for. This bank could slightly be underperforming their peers in the immediate future, because of their exposure to South America. Dividend yield of 4.2%.

Technically this has not been doing well lately. This has 2 periods of seasonal strength. One is coming up fairly soon, about the middle of August, when banks start to go into a period of seasonal strength, which lasts right through until the end of November. Technically this is underperforming the market and is in a trading range, and momentum indicators are kind of mixed. When you see the stock move above the trading range, that will be the sign that we are into the period of seasonal strength. Dividend yield of 4.3%.

This bank has viewed itself as more international, especially in the emerging markets. However, they are not always the leader in that area. Because of those countries, this bank has the opportunity to be a higher growth company, but the issue they face is that it is much more volatile. Not expensive, and you get the benefit if emerging markets turn around.

For the banking sector in Canada, the important thing to remember is that it is a very limited competition market. 5 big players and a few smaller ones, and that lends itself to good returns for investors over time. Banks are something you want to own and average into. This bank has been the hardest hit over the last 1-1.5 years because of its exposure to oil and gas loans. Because of this, it may be on sale relative to the other banks, and this is the one he has been adding to in the last year, more aggressively than the others.

(Market Call Minute.)

It has busted out of the downtrend. Basically it now looks pretty good. However, he would prefer another bank because BNS has high exposure to resources.

This bank is 50% international and 50% Canadian. It had lagged last year, but has been the best performer this year so far. The international in the last quarter was pretty good.

(A Top Pick May 26/15. Up 4.83%.) The only Canadian bank he owns. He doesn’t have big exposure in Canadian banks. The outlook for writing off loans is getting worse. He worries about real estate, oil/gas exposure. There are better growth opportunities outside of Canadian banks.

It is fine for the long term, as are the other Canadian banks. He always liked their Latin American business. They are unusual amongst the 5 banks.

(A Top Pick July 16/15. Up 5.88%.) Has been a little challenged this year. Took a big hit on their loan portfolio this quarter, and management has indicated that that is probably the peak of their loan problems. There will still be loan loss provisions coming out into 2017 for all the banks.

Bank of Nova Scotia (BNS-T) or TD (TD-T) and FinTech competition? Everybody is competing with FinTech these days and all the banks have issues. A lot of FinTech’s advantage is that they are not really regulated at this stage and can do a lot of things regular banks cannot do. Banks are taking measures including cutting costs, introducing new technology, etc. It is still early stage. The choice between these 2 banks is that TD has better exposure and this one has better International exposure. At this point he thinks TD is winning out with a steadier economy.

Have had a very good recent quarter. He likes the diversification. Have an international footprint, but have lost the premium that they tend to trade at relative to the other banks. That is usually a good time to be looking at banks. Inevitably in the cycle it is going to come back again. Likes the strong focus they are putting on cost and expense control. 4.4% dividend yield.

BNS-T vs. NA-T. Totally different. BNS-T is a global bank leaning toward the Caribbean. NA-T is not the same thing. This environment is constructive for developed markets with energy prices staying stable. He prefers more North American exposure so chooses NA-T. He would prefer RY-T to either of these.

This name has too high of a short interest. They have a high exposure to emerging markets. The energy book is well contained compared to peers. It has a 4.4% dividend that will grow over time.