Toronto-Dominion Bank (TD.TO)

An excellent company and he is a big believer in their story in the US.

The multiple downgrade on all Canadian banks is far too overdone. This has suffered from the Short selling, and 3.5% of its flow is now Short. The general growth of business in the US and Canada, particularly in the US, is going to augur quite well. Dividend yield of 3.76%.

He likes their big US presence. They did their acquisitions at good prices. They have a good brand, especially in New York. They understand mortgage lending quite well. Their Canadian side is quite strong. Bank North was like Canada Trust was. It has all played out quite well.

In general, you can hold onto all of your Canadian banks. This is probably not a good time to be selling. Banks have been under pressure for some time. This bank has exposure to the best market in the world right now, the US. A well managed company.

He has owned it forever. They are great bankers. Half their revenue comes from the US and they will be the biggest benefactor if interest rates ever go up. They are one of the strongest retail banks in Canada and in the US. They did a bunch of cost cutting and he thinks they will surprise on their numbers when they come out.

It was one of the leaders. We had a period of bullish congestion since mid-2014. You probably should own banks. You could own a basket. He sees no harm done.

Short interest on the banks is the highest it has ever been. Provisions for credit losses should increase. The US exposure mitigates energy exposure. It lines up pretty well with the rest.

If you are looking for US exposure this is the Canadian one to buy. He prefers to go to the US and buy one there, but in Canada it is better to buy TD than other Canadian banks.

He likes this bank, and it is one of his larger holdings. Very well-run. Earnings growth is more limited than he would have thought a year ago, but thinks it will be in the 5% area for the coming year. This is below their longer-term target. If and when interest rates increase, their US operations will deliver good earnings growth. They continue to do very well at P&C area in Canada. Trading at a very cheap a multiple.

10.5 times 2015 earnings. A nice dividend of about 4%. Fears about Canadian banks are grossly exaggerated. They won’t get killed by the oil patch.

This is his favourite bank. He also owns Bank of Nova Scotia (BNS-T). Both of these banks are 50% non-Canadian. He thinks this goes back to $56-$57 a year from now. (See Top Picks.)

He is getting more constructive on Canadian banks. They reported decent numbers across the board. This one was a little disappointing relative to the others. The ROE’s for the banking sector, of around 16%, are sustainable going forward. His only concern is that you are going to see very limited loan growth, approximating 5%-6%, during the next 2 years, which will limit the multiple expansion and capital appreciation potential. If oil prices move up, he thinks you see a little bit of new faith in Canadian banks. This and Royal (RY-T) would be his favourites in Canada.

(A Top Pick Oct 29/14. Down 0.54%.) Their quarterly report was fine. Was a little surprised to see the lack of progress on the US side, because that was part of his reason for this being his biggest bank position. Still the 2^nd best performing Canadian bank over the last year, as well as year to date.

An exceptionally well-run bank. Very, very strong franchise in the US. With a reasonable timeframe of a number of years, you are going to get paid 4.25% or so and see some decent earnings growth over the long-term. (See Top Picks.)

Down 15.4% from its high. The discount on this is far too great, even taking into account the banks headwinds in Canada of real estate and oil. The opportunity for their US division to increase their mortgage exposure is tremendous. They are the exclusive distributor for Nordstrom retailer credit cards. Dividend yield of 4.18%.