Cole Kachur Toronto-Dominion Bank TD-T WAIT Jun 03, 2024

It ranks in the middle of the path. Has estimated earnings growth of 8% in 2025 and 5% in 2026. Free cash flow is down 21% year over year. Overall return of invested capital is less than 1/4 of 1%. If switching you could go to CIBC

Has broken to new highs, along with its peers, but volumes have been declining recently. This is set up for a correction after this big run, so wait for that correction. He's very bullish on Canada for the next few years (Ottawa will spend on infrastructure). As for US, that is forcing Canada to look at Europe and China for more trade, such as natural gas. We're looking globally now, and not only to the south.

Surprising how much it's come back, due in large part to sentiment having been so negative. Penalties will dampen growth. Still, numbers for both US and Canadian financials are starting to accelerate. Canadian banks over-provisioned for loan losses; if they don't have to tap into those reserves, should see really strong numbers going forward. On technicals, all the Canadian banks are moving up the ranks.

He got out recently. Caught up on valuation once people realized how over-capitalized they were in wake of US fines. Still no growth in the US, so where's growth going to come from? He switched into CM, but now that's looking expensive.

Recently lightened up on re-rating, but still likes it. Now trades at almost parity or slight discount to peers. US missteps are behind them. Incurring lots of expenses to step up anti-money-laundering compliance. How long will they be in the US penalty box? WFC was there for 7 years, and he hopes it won't be that long for TD.

Feels should be able to reach growth guidance of 7%. Will have to pull other levers such as tightening belt in Canada, growing capital markets, or competing more fiercely ("elbows up";).

Up 32% YTD, great run. If you hold and it's reaching a point where you're comfortable selling, you'll probably want to pick a strike that's close to where the stock's trading. 

If you go to October and sell the $105 call, you'll only get about 90 cents. But if do it 4-5 times in a year, it'll really add to the overall yield. Worst-case scenario is that the stock goes up and you have to sell at an even higher price.

More growth to be had. Once they get over the hurdle of the money-laundering fine, will continue to be a Canadian bank. Canadian banks are protected by the Government of Canada, so nothing's going to happen to TD. If Canada's able to get rid of interprovincial trade barriers, TD and the banks will be primed to do well.

If you don't own any of the other big 5, he'd add some exposure there instead. But if you own them all, and you have some cash on hand, then sure, buy some more of this for additional dividends while you wait for the stock price to appreciate.

Has delivered returns long term, but it remains in the penalty box--they can't make acquisitions in the US. This impacts growth for the next few years. They will probably build up excess capital and buyback shares and through dividends.

Can go higher. Still doubt after US fine, so hasn't fully recovered. Back on track. Once that issue gets further in the rearview mirror, people will bid the shares up. Great buy-and-hold, same category as RY. 

TD's been the best over his career. US issue hit hard. Canadian business is solid and extremely well run. Can't expand the US business, but can upgrade it, so he's not too concerned. Still a large holding, but he's been selling it down and putting profits into BNS.