TSE:RY

Royal Bank (RY.TO)

290.00
+2.44 (0.85%)
as of Nov 11, 2026, 9:00:00 pm Market Closed.
1478 watching
0
DON'T BUY
The banks have all had negative reports. Chart shows a double top in 2010-2011. Broke major support at around $50. A falling knife.
BUY ON WEAKNESS
Terrific name for the longer term. They are one of the more levered names to wholesale business. Net interest margins for banks continue to come down, which is a headwind. One wonders if their growth might start to slow if Canadian balance sheets start to get stretched and we get to the top of our real estate curve.
TOP PICK
(A Top Pick Sept 22/10. Down 15.08%.) You want to get banks, particularly those in Canada, when they are mis-priced relative to the rest of the group. This bank has had its share of problems recently. Sold off their US retail operations. For years and years, it has commanded a premium multiple. Good reward in 5 years.
WAIT
One of the first times in his career when he was not an owner of Canadian banks. Canadian housing market is poised to soften at some point. He sees some downside in the banks. Dividends are secure but he thinks they have more to fall. If another 10% dip he would be buying. Fantastic franchise.
TOP PICK
3.18% due Nov 2/15. Financials under performing. (Subordinated, not the seniors.) Cdn banks have very strong footing. They have the option to roll over for another 5 years.
COMMENT
Toronto Dominion (TD-T) or Royal (RY-T) for a long-term hold? Royal just sold their US retail operations while TD continues to expand and is attracting a lot of deposits. Would prefer TD because of less trading activity but a very hard question as they are both very close.
TOP PICK
(A Top Pick Sept 27/10. Down 9.37%.)Has been a laggard among Canadian banks, primarily because of the volatility in their trading revenue. Their domestic franchise is very strong and posted pretty good earnings. Wealth management, long-term, is the right direction as demographics favour this. Yield of about 4.7%.
BUY
Flip-flopped each quarter with one quarter having good earnings in the next having poor earnings. This has to do with trading. Capital Market is an impossible business to analyze. Earnings will increase going forward since they sold off their US assets. (See Top Picks.)
COMMENT
Last couple of earnings reports have disappointed the street. Trade at around 2X book. US strategy has failed. Have been impacted by being a beta for the global market. Doesn't expect it will do anything for the next 6 months. Needs the global markets to recover. This is a 2012-2013 story. (See Top Picks.)
HOLD
Of the banks, this is not one of his favourites. There was a lot of anticipation that they would do quite well with capital markets coming back so there has been a lot of frustration.
COMMENT
All banks are struggling but this one has been struggling more than others. Getting out of US retail banking was a positive. The dominant player in retail banking in Canada and are looking to grow the business in the capital market in trading. Have been making acquisitions recently in Europe.
DON'T BUY
As a GARP manager he doesn't see a lot of growth. There is a perceived risk globally of what is the Canadian exposure to the global issue of sovereign debt and other bank credits that they might own. Recruiting out of the US, they could have some debt and restructuring for the next few quarters.
DON'T BUY
Current market conditions suggest markets are likely to be weak. It broke support and is in a major down trend.
PAST TOP PICK
(A Top Pick Sept 9/10. Down 3.86%.) Earnings were a little light, primarily because of lower margins. They are more geared towards capital markets, which was light on the trading side. Still a Hold.
DON'T BUY
Hasn't been a fan of this bank. Didn't like their presence in retail banking in the US. They will lose money when they sell this. A lot of their earnings come from trading, which is a highly volatile business. Unpredictable.
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