Home Capital Group (HCG.TO)

Management has done a fantastic job. A lot of exposure to the Canadian housing market and he doesn’t think it is prudent to have exposure to our housing market. Feels the stock has had a big push because the Shorts have been covering. Not certain that there will be a lot more to push this higher.

A play on Canada’s overheated housing market. Chart shows an advance from early 2009 through 2010 followed by bullish congestion in 2011 and 2012, followed by another advance this year.

Our housing market is no different than other housing markets, but qualifications in our mortgage market are definitely different than in the US. You could also look at Counsel (CXS-T). Both are quite good names.

Surged today. He should have owned it. You are seeing banks moving away from anything non-prime. This allows them to have a really good run in that market. US were shorting it, expecting a US style housing crisis but it didn’t happen. It is a trade.

This one has been a “long-term hold” forever. Great track record and raises its dividend. If it is ever going to be a trading stock instead, it is coming if and when you believe we have some sort of quasi housing crisis in Canada, or at least a flattening out. That is when it might take a little bit of a hit.

(A Top Pick Sept 26/12. Up 25.44%.) A Canadian housing story that focuses on urban centers and gives mortgages to people who can’t quite get a mortgage from a bank. Great management team and great lending practices. Stock is very cheap relative to the banks and they have a much higher ROE.

(Market Call Minute.) Consistently high ROE. Thinks there is a short squeeze going on by all the Americans that shorted it and he thinks it is going higher.

Mortgage lender and extremely well run. Specialize in people who were turned away by banks. A serial increaser of their dividends. 1.7% dividend.

Feels the US and European Shorts are wrong. However, you are still going to face the headline risks with this one. On a fundamental basis they are doing absolutely fine. Can see it at $68 in the next year.

(A Top Pick July 12/12. Up 29.21%.) Very cheap at this price and should be closer to $65.

(Top Pick Sep 26/12, Up 9.95%) An extremely well run business. Still likes the business. Does not see a housing bubble to scare him out of the name.

One of his larger positions. Company has done really, really well. What could be exciting going forward is that there are a lot of people, particularly in the US, who have big Short positions on the stock because they think Canada is going to have a US style real estate meltdown. He doesn’t think so. Buy this through the summer on a day when it has been really hammered.

Thinks the Short sales on this stock is completely misplaced. The US short-sellers don’t understand Canada’s market. We won’t have the same downswing in housing that the US had. Has a high ROE.

Mortgages that the banks don't want, but well secured by the value of the house. They've had a nice correction, by some US hedge fund managers who don't understand the Canadian market, they "are going to loose their shirts by betting against the banks" :)

A very good entry point. Other companies in the same area that are a bit less expensive are Equitable Group or Capital group. More growth, or upside from the smaller companies.

The stock has been a little weak lately. They are an alternative lender. They are well capitalized. Trades at very low multiple to earnings around 9X. Long track record of profitable growth. Thinks the stock is low because of unfounded concerns of a housing price crash.