Royal Bank (RY.TO)

Has not been adding to his holdings recently. Canadian banks are relatively inexpensive right now. Earnings are starting to turn back up. You have big US Short sellers that are starting to cover, which is pushing the stocks higher. (See Top Picks.)

Not a good time seasonally at the moment. But this one is still in an uptrend. Stick with an uptrend when you have one. Usually best starting October of each year.

(Market Call Minute.) Likes this but it is at its 52-week high so Buy on weakness.

All banks are reasonably valued now. Royal has now run up so he would look at others. Today you are getting almost 4% and they have captured some of the discount from a year or so ago. Would not add to position.

Where would you buy this stock, through Canada or the US? Doesn’t think there is any particular advantage. You might even find yourself at a disadvantage from a tax point of view if you held it in the US.

Seasonality of Canadian versus US banks? Seasonality is similar for both. Canadian banks have their run from October into December and then from January into April. However, Canadian banks pay a higher dividend so they are little bit more defensive. A lot of Canadians have a large portion of their accounts in banks but this is not the time that the banks tend to run so it is a defensive sector. This one pays 4.1% dividend.

Likes Cdn banks. This one blew the pants off all the other banks on the last quarter. Strong balance sheet. ROE in the last 12 months is up about 20%, not including dividends.

Banks have pulled back and a lot of this has been driven by misinformed speculation in the US, as to the condition of our housing market and the vulnerability of the banks to the mortgages. They don’t really understand how our mortgage market works. Loan to Value ratio overall, there is a 3^rd or more of equity. This bank is very strong, not only in retail banking but also has a very strong presence in capital markets. Earning about a 19% return on equity. Dividend yield of about 4.3%.

This would be his 3^rd favourite bank of the big 5 Canadian banks. This is down for a macro reason. There has been a story of US Shorting of Canadian banks because they misunderstand how our mortgage/loan book works. Banks are pretty good value at these prices. (See Top Picks.)

Although he owns some, it’s not his major bank holding. If you own, consider switching to Bank of Nova Scotia (BNS-T). His only complaint about this one is the lack of exposure outside of Canada.

The whole Cdn banking sector kind of peaked at the beginning of the year. This one should hold at the support level at about $59.50. RSI indicates financials are coming down a little bit. The stronger plays in this sector would be some of the insurance companies such as Manulife (MFC-T), Sun Life (SLF-T) or Great West (GWO-T).

Likes Canadian financials. RY is a wonderfully well-run company. They are the Canadian global capital markets story. They are the number 10 asset manager globally and #10 advisory service. Prefers US financials right now, however. He still has TD and Commerce as well.

LIkes Royal. Increasing their dividend at 4%. Best personal and commercial franshise in Canada. Have the best wealth management. Going forward earnings growth will be lack luster. Canada's lending environment is going to weaken which will hurt Royal. Dividend is safe and will likely increase. They will likely acquire more wealth management franchises or buy back stock.

(Since June 5, 2012, up 25.58%) Candadian banks are cheap right now. Recommends buying them.He still owns this stock. Doesn't believe there will be a collapse of mortgages, as 65% of mortgages are insured through the CMHC. Rents are going up and there seems to be a shortage of housing.

Should be long term hold, or in and out? Depends on the person and their risk vs reward. Banks are a great long term investment. He thinks it will pull back as the US banks gain, so for his clients he would take some profits, but not all. If you wanted to stay and get the dividends, ZWB gives slightly higher yields, but equal exposure to all the banks.