Bank of Nova Scotia (BNS.TO)

This bank has Latin America, the Caribbean and Asia. If you are concerned about the problems in the domestic market, this and Toronto Dominion (TD-T) are the 2 banks that have non-Canadian exposure. This bank has been an under performer because of problems in its emerging-market book. If you are going to buy one bank, it would be this one.

Well-run bank. They have a new CEO who is shaking things up quite a bit. Had some problems in their Latin American and Caribbean operations. He thinks the 4.33% dividend is safe and will protect you in a sloppy market. Canadian bank stocks look attractive here. They have all had 10%-15% corrections.

Their international exposure does not affect his analysis. RY-T has had no upside to model price for years and now has over 10%. The model price for BNS-T is $74.71 or 15% upside. It looks attractive here.

Thinks Canadian Banks move sideways for a while. At $66-7 it is probably not compelling. He has reduced bank exposure. The dividend is safe and attractive. You may get an opportunity to get it at the low end of the trading range sometime this year.

You would own this one for its International exposure and its decent dividend profile.

We have seen a mix of earnings coming out from the banks. On this one, you are dealing with a different kind of international diversification. Not sure that their exposure to South America and the Caribbean are going to be a big positive catalyst right now. He does like this bank and thinks it is fairly well priced at the current levels. Dividend yield of 4%.

Banks have had a real downturn, and from what he can understand it is because of guys in New York that are Shorting Canadian banks. If you are concerned about slow growth in Canada, Mexico is booming, Central and South America are doing okay. This is where he expects the growth to come from. This is a conservative bank. Yield of 3.90%.

The most “international” of the Canadian banks, so if you want participation in what is going on in the rest of the world, this is going to be your best bet. However, if the rest of the world remains weak, this is the one that is the most vulnerable. If you want to trade the trend right now, Toronto Dominion (TD-T) is probably your best bet for exposure to the US.

He likes Canadian banks here. They have 2 periods of seasonal strength. One is from mid-January all the way through to April and the other one is more towards late summer, but October through to early December is the next period. Chart shows this is breaking the trend line resistance into the period of seasonal strength. It was good to him.

For a long term hold, Bank of Nova Scotia (BNS-T) or Toronto Dominion (TD-T)? Of these 2, he prefers the exposure to the US that TD has.

If the Canadian economy slows, it makes people a little concerned going on from here. Any time you have a bit of a blip in respect to credit related to the banks, it is sort of exacerbated. As a shareholder, you are not going to get hurt like you would in the US, but you can definitely feel it. He is a little concerned because the credit cycle has been very favourable for a long period of time. It is a cycle and it does come back. He is generally underweight banks and would want to wait before getting a little more comfortable.

He likes this because it has so much foreign income and its growth in foreign markets, particularly in South America and Mexico. He thinks it is undervalued. Dividend yield of 4.16% is terrific.

Toronto Dominion (TD-T) or Bank of Nova Scotia (BNS-T)? He does not have a favourite between these 2. They have different characteristics. The main point at the moment is that the banks are tending to be under a bit of pressure. Chartists will tell you they have broken out of their awesome moves over the last few months, and will continue lower for a while. This is partly to do with interest rates and partly to do with the profits they will make on narrow spreads.

Was always viewed as a low cost operator that didn’t pay their staff all that well and ran an amazing international franchise in Latin America. New management has taken out a lot of senior people very quickly, and that is making some people nervous. Has also been addressing some of the problems and concerns in Latin America, which has got people really worried. This is trading at a reasonable valuation. He likes what the new management is doing.

Leadership has changed in the last 1.5 years. What impact does this have? The quick answer is extra risks as there are always risks with a change in leadership. However, this is a Canadian pillar and when you are talking about change in leadership, everything is in place there. You’d really have to find an incompetent CEO to blow up the balance sheet and that is not happening here. ROE is still around 13%-14% and they are cheaper than a lot of the premier banks, so there is some opportunity. He has always shied away from there holdings in Latin America.