Stockchase Opinions

Peter Arender, CFA Power Financial Corp PWF-T DON'T BUY Apr 21, 2004

Feels that this company and Power Financial look quite expensive. Could have 20/25% down side.
$57.730

Stock price when the opinion was issued

finance leasing
It's the ideal tool to help you make quicker, more informed decisions for managing and tracking your investments.

You might be interested:

PAST TOP PICK
(A Top Pick Dec 19/18, Up 35%) He thinks it is a defensive holding as the dividend is strong and there is good earnings growth. He would continue to hold it.
HOLD

PWF is a holding that she has for the income. PWF and POW are going to merge, which is driving up the value of both today. The merger is one way to close the gap between market valuations of the two. There is some thought the dividend will increase and the new entity plans to buy back shares. She will continue to hold as it an income stock. The yield is still over 5%.

BUY

Investors are quite happy with the recent news to merge this with POW-T which will drive the stock higher. He hopes they exit more businesses that aren't core, like in industrial.

DON'T BUY
A financial group that he’s invested in the past. However, things have gone sideways recently. The two eras have moved out of the company which was rewarded by the markets. He would prefer banks with better yields in some cases.
DON'T BUY

It recently got re-amalgamated with the holding company. He prefers TD-T at these levels. He worries about the Great West Life part of PWF-T. TD-T has a bigger US presence.

SELL ON STRENGTH
$30-36 is the range to play within it. A trading stock. Financials, like this, are now toppy. PWF is stuck in this range.
WEAK BUY
Their consolidation will benefit shareholders, but remember that life insurance is the underlying business, which depends on investing the unearned premiums over time. Traditionally that's been bonds, but interest rates are low. Finally, the company has woken up and he hopes new moves will put spark into the company. Pays a good 5.3% yield.
COMMENT

You could sit and wait to do the share swop from Power Financial into Power Corp. The two companies have been performing the same. The WestJet acquisition fits into their other subsidiaries. WestJet will be a private company and it won't be posting numbers going forwards.

PARTIAL SELL

Doesn't like the merger with POW. Sell PWF and buy Aecon? Don't because Aecon has its own issues, and the merger makes sense. PWF/POW was an old-1980s structure and needed to consolidate to raise the overall value. Problem is, there's is little growth in the company's existing businesses. Mutual funds are getting crushed by ETFs, and low interest rates limit revenues. You can sell and buy something else, but not Aecon though to be fair he hasn't looked closely at it lately.

PAST TOP PICK
(A Top Pick Dec 04/19, Up 13%) He'd buy it again. Nice value stock. Nice yield. Trading at discount to book. Would benefit from rising interest rates, which he expects. Cheaper than all the banks.