Canadian Imperial Bank of Commerce (CM.TO)

Will it split? He loves to see splits to be retail friendly. Doesn't see a split here.

He thinks CIBC is one of the two best opportunities in the financial space in Canada, on a valuation basis. The other is National Bank (NA-T). With the selloff, CIBC currently trades at about 10 times, giving about a 4.5% yield. It is difficult to think of an environment in which a Canadian would not have this stock in their portfolio. You can enhance your return by buying at opportune times. This pullback gives a good buying opportunity.

This is the strong seasonal period for Canada banks until mid-April. They are doing well this year, but have not had that strong uplift we expect. CM-T should come down to about $104. It will underperform because it has less US exposure. He would wait for strength before jumping in.

He bought it a while ago, likes the chart. After the TSX settles out from this correction, the TSX might rally well in the spring and a rally in the TSX will include the bank stocks. Buy after the correction.

Banks have been played as investments that win in a rising interest rate environment. You only get a 3% yield but as bonds goes up they looks more attractive. He does not think dividends will grow as fast as in the past.

A good commercial bank. It has improved in the later years concentrating more on the retail side and not trying to be an investment bank. They bought a bank in the US and they had to pay more than they expected. They are executing particularly well though on that acquisition. Cost structures continue to come down. Banking is changing in general like retail is.

All Canadian banks have been home runs since the financial crisis. They are all in slightly different businesses. Toronto Dominion (TD-T) is more in the US, Royal (RY-T) is more in capital markets, etc. This one is more of a domestic bank and focused on retail and wealth management, so they are a bit less dynamic. If you own, hang onto it and just leave it alone. The banks are in good shape, as long as the Canadian consumer credit situation holds up.

They have lagged a lot of the other banks in the last couple of years but management has done wise things. They pushed into the US with wealth business. The more exposure to the US economy the better. It has always had the lowest multiple and the highest yield, so there is no reason to jump ship right now.

They have lagged a lot of the other banks in the last couple of years but management has done wise things. They pushed into the US with wealth business. The more exposure to the US economy the better. It has always had the lowest multiple and the highest yield, so there is no reason to jump ship right now.

Dividend yield of 4.3%. (Analysts' price target is $130.)

Management is still doing a phenomenal job and it is still the highest yielding bank. All 5 Canadian banks are something he is interested in. It’s a horserace between all 5, as they are all great. He owns Royal Bank (RY-T) and Bank of Nova Scotia (BNS-T).

On their acquisition of Private Bank Corp, did they pay too much? They probably did. They were under pressure as they were one of the few Canadian banks that had nothing in the US. The US bank stocks took off and they ended up paying more for it. The acquisition helped their last quarter. On their other numbers, they have done well.

This just broke out to an all-time high. Canadian bank stocks have very distinct seasonality. Historically they have gone up as you get close to the end of the year. Normally they peak around the end of December. This year we have had an extension which has taken it into a higher level and an all-time high. Stocks like this, once they get into a new year, have a tendency to have an underperformance in the new year, the beginning of January through to the end of March.

Canadian banks are a core part of anyone’s portfolio. Lots of positive stuff about them. CIBC was one of the two banks who beat expectation in last earnings. We see Canadian banks outperform from August after Q3 earnings and have to see strong earnings in Q4; otherwise they tend to underperform. Seeing some softness in the general banks. Sold their Canadian financial sector positions at the end of November. Looking to get back in the sector late January. On the technical basis, breaking above $125 or so would be positive technically. Right now, banks can still move up. It’s not that they aren’t positive at this time of the year, but it’s just that they tend to underperform the TSX Composite at the moment.

This and Bank of Montréal (BMO-T) are similar in that, year to date they haven’t done much. Trading at somewhat of a discount to the others. He likes this one, but wouldn’t bet the farm on one bank only.