Canadian Imperial Bank of Commerce (CM.TO)

They are big into mortgages. They have balanced their business and sees no hesitation in owing it. He owns other Canadian banks that have a better growth outlook.

It has been in an uptrend. Just entering into the buy season for the Canadian banks. Typically performs well from October until the end of the year. The trend is good and he is still holding it.

He likes it. The move into the US was timely. They took some risk off the table. He thinks they are in the early stages of realizing the benefits of that US exposure. They might be vulnerable to a pullback but there is upside over the next 3-5 years.

They are executing well in the US. They are in the early stages. We are in the early stages of enjoying the benefits of their acquisitions. (Analysts’ target: $130.33).

It has the largest mortgage portfolio in Canada, and 20% of Canadians are stressed about their mortgages. This probably is pressuring this stock, but he sees nothing wrong with CIBC. When the market rises, so will the banks.

Housing could be an issue but CIBC is bearing the brunt of it. They are at the high end of the six big banks. He would rather buy it at lower rather than higher prices. Growth will probably not be there as in the last months.

Even with a bad period, Canadian banks always bounce back. Buy the best of breed--TD, Scotia, Royal. But CIBC isn't in the top tier. That said, all the Canadian banks more or less trade in line over time. You can buy this, but there are
better Canadian banks.

Interest rates are rising and investors are doubting the stock. Also, the Canadian housing market is still correcting, ando ur household debt to income is the highest among industrialized countries. Their chart is not bearish, but it's lost upside momentum. Wait until it tests $104 again and whether it holds--then dip your toe in.

(A Top Pick April 28/17 Up 7%) Their exposure to mortgages is causing some possible headwinds in a rising interest rate environment – due to the risk of higher defaults. Their capital ratio is a little over 11% and they have good cost control. It remains a good core holding. Yield 4.7%.

Despite an earnings beat the share price is down almost 2%. The concern today is about mortgage origination. CM-T has large exposure to the residential mortgage market. This trend is scary for the sector as a whole.

Banks in the US had good numbers but the stocks are all down. So how much of the higher interest rates are already baked into the numbers. Loan loss provisions are at low levels. People are concerned about defaults. He has not been adding banks. This one's yield is higher than most, but he is not jumping up and down to buy more and is looking to expand elsewhere.

One of his larger bank holdings. There is a perception that they are more exposed to Canadian retail and mortgages, which is somewhat true. It trades at a reasonable multiple of book and is well capitalized, so he is quite content to hold it. Their last quarter was pretty good.

After a long consolidation, it is in a healthy up channel making higher highs and higher lows he says. Try to buy below the midpoint of the up-channel to reduce your risk of entry.

The Canadian banks have done incredibly well since the recession. They offer great dividends, but how much further can they go? The bottom lines are phenomenal, but he is concerned that the banks might be making too much money. There is a risk of overexpanding -- banks often do stupid things when they have a lot of money coming in, resulting in huge writedowns. Therefore he would not buy any of the Canadian banks at this time. With interest rates going up, this is good for the banks, but the economy will turn. Remember 2008/2009 when you could have these stocks for a pittance--this will happen again.

He is a fan of this company. Canadian banks are not cheap, nor are they expensive. He likes Bank of America (BAC-N) better as they are only paying out 20% of earnings versus up to 50% for CM-T. Yield 4.5%.