Canadian Western Bank (CWB.TO)

Doesn’t think the lower stock price is just based on oil and gas lending. The market is worried about the consumer exposure to Western Canada. There have been a series of price increases in homes. Some people have been forced to go out and buy a home, probably at uncomfortable levels. The presumption is that this bank has been a lender to these mortgages, and who knows if these people are going to have a job. Feels that is a legitimate concern. He would be very cautious on this bank.

Prefers BNS-T because it has the least exposure to the Canadian banking sector. Main exposure is in Latin America and Asia.

Their dominant operation is in the energy geographies, and he feels that is where a lot of the concerns have rolled in. Selling at a relative discount to the other banks than it used to. Latest quarter has been okay. Net interest margin was squeezed a little in the last quarter, but those things are transitory. Have a fairly good capital base. Tier one capital is about 8% and thinks they will probably have to increase that over time. Longer term, this is probably a pretty good investment to have. Yield is just a little over 2%. You get a much better yield with some of the other Canadian banks.

Normally strong from October to the end of year and then the end of February until May. Tecnhnicals now are mixed. It is struggling short term. Continue to hold it.

Likes this. Has been a consistently successful operation. It’s in the fastest-growing economy of Alberta and the Prairies.

This is spot on its model price of $36.23.

This has been one of the big success stories. Being Western focused, it is a beneficiary of the recovery in the Alberta economy in particular. Smaller banks are often going to perform better than the majors, simply because they can gain market share from the majors.

Chart looks like it has been basing since December. It is probably lagging the group and you want to see it move out of that base before getting too excited. Wait for the breakout and then buy it.

Likes the Western based area of Canada. This bank is much smaller than the big 6, but it shows the best loan growth. If you are a bank, you want to be growing your loan book because this falls to the bottom line if you are underwriting profitable loans. This is a great niche lender and is able to grow their loans faster because they are operating in a jurisdiction that has superior growth dynamics. Yield of 2.07%. Low payout ratio, but it’s likely to grow earnings faster than the other banks.

This bank is much more concentrated on the business and commercial lending side. That’s the growth area of the country and where the banks are going to have the most growth.

(Market Call Minute.) Thinks it benefits a lot from the big capital spend in Western Canada.

Likes this bank in terms of earnings growth. Has traded sideways for the last 5 months or so. With exposure to Western Canada, expects you are going to see some good earnings growth over the next few years. Prefers this over the larger Canadian banks.

Likes this bank. Had a pretty big run up since the last quarterly earnings so doesn’t know that he would jump into it right here. Well-positioned for the Canadian marketplace. The majority of their business is in the West, which is doing better. In commercial loans which is doing better than residential. Wait for it to come back a little bit, but if you don’t own, you could own half a position.

Preferred A. Likes the banks. This is on the cusp of credit quality and these are tough to buy. He would definitely look at this name but you just have to watch for the liquidity on this.

An indirect play on the western Canadian economy. If you believe it continues to be the engine of growth in Canada, then this one is okay, otherwise NA-T screens the best with CM-T being number 2.