Canadian Imperial Bank of Commerce (CM.TO)

She owns Royal (RY-T), Toronto Dominion (TD-T) and J.P. Morgan (JPM-N) in the US. The entire Canadian banking system has had its worst start in terms of share price performance in 25 years. There has been a bit of a fund flow exodus out of Canada in general as a result of the rate cuts and the Cdn$. She views this as a great entry point for ball of the bank stocks.

The banks have dropped 15% since mid-December. This is in the middle of the quality range for Canadian banks. US banks have missed earnings forecasts and interest rates got lowered so it affected banks in North America. CM-T has never reduced the dividend, and pays 4%. It is in an oligopolistic environment. This is very positive. Their loan quality is always improving. Banks are out of favour right now. Give it time. TD-T and BNS-T would be perhaps a little better.

Has never been his favourite Canadian bank based on execution. It looks notably cheap right now, and certainly on the yield basis it looks very attractive. Doesn’t think you will get hurt owning it, but in his view, it doesn’t have the special things that would make it outperform the others.

They are cutting some 500 jobs. There is pressure on them to be more cost effective. But they say they will hire 5000 more in the next year.

They have all been hit. Perhaps it was margin calls. He has solid positions in the bank stocks. They are all in reasonable buying ranges. They aren’t focused particularly in Alberta. Don’t worry about it. Dividends are safe.

Not one of the better performers. Probably the weakest of the stocks in the sector. There are better opportunities in the sector. Look for the sector to bottom.

Manulife (MFC-T) or CIBC (CM-T)? Could the dividend be cut? He doesn’t see how banks are going to cut the dividends. The big concern for banks is if you have a cascading housing collapse or a deep recession. Demographics make sense. Canada’s population is growing. Interest rates are very low. You should own both of these in your portfolio.

In Canadian banks, there are leaders and there are laggards, but they do move as a group over a long period of time. If you are thinking of holding this for a long time, he doesn’t see any difficulties. Has a great yield. Hasn’t been a laggard in the last cycle. They are trying to do some changes.

Tends to move higher from usually October right through until the end of November. The end of November is when they report their fourth-quarter results. Typically you want to take some profits on news. The next period of seasonal strength is from around the end of February right through until May of each year. Right now we are in an in between phase where it is going to slightly underperform the rest of the market. This has been trading very close to $100 per share, and bank stocks have a tendency to split as they get close to this mark. A split will help the stock to go higher.

No issue with the sustainability of the dividends. Banks are going through adjustment to lower growth expectations. He is underweight the banks, but you don’t want to be right out of them.

On a short-term basis, this bank is running into resistance. Some of the indicators are a little bit high right now. The whole sector is reasonable and ranks well. One of the few pro-cyclical sectors that do rank well besides tech and industrials. He would rather pick this one up at around $95 or wait for it to break out to new highs at around $107.

If he were going to add a 4th position to his holdings, it would be a tough call between this and the Bank of Nova Scotia (BNS-T). If you are looking for a plain vanilla, solidly run bank, this is probably one you should own. Highly focused on domestic business. The new chairman coming in is very much focused on building up the wealth management part of the business. One of the cheapest of the bunch. Good yield.

Reaches a low about the end of September and then moves higher by end of year. Has an upward trend. Is strong compared to the TSX. But it is trading below its 20 day moving average. Buy it around $96 where it has technical support. US banks have different seasonality than Canadian banks because of timing of when Q4 results come out (Feb vs. Nov).

(Market Call Minute) It is the most domestic of the banks and he is down on domestic banking.

Switch from Toronto Dominion? This is an okay trade. The 5 Canadian banks are all interchangeable and you can own them at any given point in time. When the new management comes into this bank, there are some real opportunities, because it has lagged quite a bit.