Laurentian Bank (LB.TO)

It is the smallest of the banks. It does not have the scale. They have issues with mortgages. He would avoid it.

He prefers the U.S. banks because there's more growth in that economy. Also, U.S. bank stocks were beaten down. More upside there. They've also pulled back the past six months, so they're now attractive. Canadian banks are an
oligopoly, so are good long-term. LB is regional and hasn't looked at his closely. It's also lagged the big Canadian banks.

He would view it as a value trap. The spread is wider than it has been historically. The dividend looks attractive. It has a low PE and a high dividend yield so looks attractive. The issue is how Canadian-centric they are. He worries about investing in a solely Canadian bank relying on the Canadian consumer. They are betting the farm on Canada and the Canadian economy.

The smallest major bank. Valuation is the cheapest, too, in Canada, at slightly less book value, due to problems in mortgages over the past year. LB has handled that by now. LB has always had great credit quality with customers. It isn't his major bank to own, but could be a part of a portfolio.

Sells at a nice discount to book, good upside, decent yield. Selling at half the valuation of the other banks though it doesn't perform as well as them. (5.4% dividend yield) (Analysts' price target: $52.40)

It's dropped from $58 to $47 since last fall. Hold onto it at current levels. Good technical profile and risk-to-reward. Among financials, though, he prefers BMO and Fairfax.

A Top Pick, actually, with a great technical reversal with solid support near $45. A short term pullback below $47 is possible and he thinks this is a good time to be buyer with $45 as a stop.

The stock is trading down at a very low level. There is probably a nice recovery of 20-25% in the stock. (Analysts’ target: $52.40).

If he looked at any Canadian bank this would be front of the line. The pullback was quite something. It is a good solid bank. If banks take a beating, this one would do so too.

Fundamentally, some other banks have acted better. Financials have been acting weakly. It had been in an upward channel for a couple of years, then broke the trend. Between $40 and $46 will bring buyers in, hold it there, don’t add until it’s above $55.

This is a tier II bank. It has a choppy technical pattern. When support near $52 broke, it will now act as resistance and a new down trend has emerged. He would avoid it, waiting for some consolidation.

RSI measures how quickly a stock has moved. A low (oversold) RSI is not in itself a buy signal. A stock can remain oversold or overbought for a long while. Around $42 is a reasonable price target. LB was hit by questionable mortgages that they had to buy back. Wait until the overhead supply has been digested and a base forms.

The fair market value of this stock is very optimistic. It has fallen back to a support level and is an interesting buy opportunity at present. It has a nice dividend and lots of upside potential.

For the risk adverse investor, the mortgage issues they have recently had requiring reserve requirements and buybacks is making them a little more risky, hence the higher yield. It is trading below book value with a 5.6% yield and he thinks the dividend is safe for a long term investor. Yield 5.6%.

Three months they stumbled on a Home Capital-like issue with their reporting. In one day, the stock fell from $60 to $55 and has drifted down futher because Canadian banks are out of favour. Under $50, this stock looks cheap. If you can wait a few quarters, this should rise 10%, and in a few years maybe return to the $60s.