Opinions
James Telfser
Home Capital Group
HCG-T
TOP PICK
Sep 26, 2012
$50.760
Stock price when the opinion was issued
investment companies
funds
It's the ideal tool to help you make quicker, more informed decisions for
managing and tracking your investments.
You might be interested:
BUY
What is interesting about them is that they came through mortgage hell in 2008 with barely a ripple. It has also emerged from COVID-19 issues with barely a ripple. It is very cheap compared to its long term book value of $45. The fair market value is huge and the balance sheet is fine. He wishes they would institute a dividend that would give investors more comfortable that everything is fine. He thinks deferred mortgage payments will not be an issue for them. In a recovery, it will do very well.
investment companies
funds
STRONG BUY
A few years ago, it was one of his beloved stocks until it got slammed by comments from the U.S. and OSC. It has since rebounded. Its fair market value is 154% higher than the current price. If it can break out from the current $45 price, this will enjoy a nice upside. They are also buying back a lot of shares, which he thinks is stupid; raise the dividend instead.
investment companies
funds
DON'T BUY
If you want to own a lender, please own Canadian bank stocks instead. HCG and others don't have the same access to capital, so they can get caught in a liquidity squeeze. Borrowers pay a higher rate of interest. If housing market has a hiccup, HCG would be more exposed than the banks.
investment companies
funds
Trading at 7-8 times next year’s earnings because of the overhang that Canadian real estate is going to collapse, which he doesn’t see happening. (Sees a slow decline.) Banks are turning away good loans, which are going to this company. Increased their loans by 39% this last quarter.