Toronto-Dominion Bank (TD.TO)

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%.

This is right at support and needs to prove that it can hold around $49. If it can hold and bounce off it, it is probably going to return to the top of the trading range.

There is lots of upside potential. It has a high quality balance sheet. From a technical point of view it is making him nervous. It has fallen to some very reliable support but that is starting to let go. Longer term he would not worry, but shorter term you might get a dip. They report next week.

Has a great franchise and it is not expensive, trading at about 11.5-12 times earnings. One of the few banks in Canada that has actually developed a franchise in the US. Have also done some very good acquisitions. Dividend yield of 4.01%.

US dollar revenues translate back to Canada quite favourably. Longer term they are a retail based franchise. They are the most conservative of the Canadian banks. Things are about as bad as they can get for the banks.

It is a good entry point to start initiating a position. It has not done well because of concerns on energy. She does not think the Canadian economy is going into recession. You don’t have to wait until they report. She expects 3-6% earnings growth. She likes the US exposure.

Canadian Banks have been under pressure with some US companies Shorting them. This one has a big US content. It hasn’t done much for a while and he is expecting better results in the upcoming quarters. Good dividend increaser. Dividend yield of 3.87%.