Stockchase Opinions

Gerald Allaye-Chan Royal Bank RY-T HOLD May 29, 2009

Long-term this one is definitely a hold. Has been very well managed and diversified. Will be a winner in the long-term.
$43.700

Stock price when the opinion was issued

banks
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PAST TOP PICK
(A Top Pick Dec 15/23, Up 37%)

A good company, but is ahead of itself now. Canada has low interest rates and a weak economy, and yet bank shares have been rallying aggressively. Wouldn't be surprised if this pulled back, but he likes this long term.

HOLD
Sell CM to buy RY?

CM is taking less on credit provisions than other banks. Positive: credit situation better than others. Negative: taking more risk and, if wrong, stock would be penalized. CM is Canada-centric. Exposed to residential mortgages and commercial real estate in Canada; two iffy sectors, but doing better than expected. Good earnings and good asset management. 

Don't sell CM. Trades more cheaply than RY. RY commands a premium price for a premium asset.

HOLD

Owns and likes.

BUY ON WEAKNESS

Rotated out of TD and into RY with its strong wealth management, giving their portfolio the needed US exposure.

PAST TOP PICK
(A Top Pick Jun 25/19, Up 94%)

Excellent bank with international presence. Will continue to own shares. Brand value very strong in Canada. Will continue to buy whenever the share price dips. Balance sheet excellent. Not exposed to the threat of tariffs from the USA. 

BUY

Her favourite Canadian bank. Well positioned domestically, US operations will benefit from capital markets activity. HSBC acquisition should increase potential domestically. 

HOLD

The best Canadian bank.

WEAK BUY

In his opinion, the only quality banks in Canada are RY and NA. Best run for decades. He's not a huge bull on the Canadian banks, but this is one of the two names he'd buy.

PAST TOP PICK
(A Top Pick Feb 09/24, Up 29%)

Will benefit from any passive flows given its huge weight in ETFs. A quality company. Is not overly concerned with credit losses.

BUY

Value scores 8/10, fundamentals 8/10. King of capital, resilience, and diversified lending. Steady, consistent beats compared to the other Canadian banks. Strong Q1, shrugging off a lot of the rate cut noise. Still sees upside in wealth management and US expansion. Rock-solid balance sheet that can weather any storm.

Slowing mortgage growth, which could continue if Canadian housing slows and tariffs ramp up. Core hold for her on reliability and growth.