Toronto-Dominion Bank (TD.TO)

Preferred shares for a retired person? When you want income and protection, he thinks preferred shares are pretty strong. This bank is a great brand with a very strong balance sheet.

His weighting in banks is 20%, which is his maximum. Currently his favourite is Bank of Nova Scotia (BNS-T) but he is not selling any of his banks. (See Top Picks.)

Preferreds paying 6.25%? Dividends come every month, but are going down in value. How come? If this was a perpetual preferred, then even though 6.25% looks attractive, he would suspect that the mechanical movements in the market and capital flow over the last several months have put pressure on this.

Nothing wrong with it. Great assets in Canada and the US. The one he likes to own in Canada but focuses on the US right now. Prefers BAC-N.

Has been a very good bank in the last few months although, in the last few weeks, because of the problems out in Alberta and in the Toronto area, its insurance division announced they were going to take a write-down this quarter. The reason this bank has been doing so well, compared to other Canadian banks, is because it is more of a US bank now than it is Canadian. Likes the outlook but prefers to own US banks directly.

Buy Jan 90 Calls at $1.60. (This is for January 2014.) The stock came off today because they are expecting some losses in their insurance division, mainly because of the flooding in Calgary. The stock is off about $1.65 today. This gives you the right to buy the shares at $90. You could actually do this with any of the Canadian banks.

Often split over $70 but it hasn’t happened yet. Stick with it because it is in an uptrend. May not want to buy it at these levels. Buy at the breakout point. $85

Would you still buy this today or would you buy a U.S. Bank such as J.P. Morgan (JPM-N) or Wells Fargo (WFC-N)? US banks, price to book, are slightly cheaper so if you believe strongly in a US housing and economic recovery, you should buy a U.S. Bank. He still likes this one, which is his favourite.

Not his top pick for today. Hit all time highs recently. Investors have been focusing on the improving economy in the US and that has driven the price up considerably. Prefers alternatives.

In the short term, he feels it is too expensive and that the Canadian banks could pull back a bit. This one is his favourite and he still buys for new accounts. Likes the US exposure and feels they are doing well in Canada. Good steady grower. Feels dividends will go up but not as fast as they have recently.

Likes their growth in the US a great deal. Their operations in the US have more branches than their Canadian operations. Recently broken out technically. Understands there is a huge Short position on Canadian banks out of New York and sooner or later they are going to figure out that this is totally Nuts. Yield of 3.7%.

(A Top Pick July 7/12. Up 10.09%.) Likes that they are primarily retail oriented so they are less volatile. Also likes the 21% that they have in the US which is shown as being a source of stronger loan growth than in Canada. Still a Buy.

Really strong management. Trades at a lower valuation than Bank of Nova Scotia (BNS-T) or Royal (RY-T) right now. Aeroplan deal is another indication of their ability to generate value for their shareholders. This is potentially a very good deal for them but if it turns out they lose, then they walk away with $70 million.

Canadian banks are quite reasonably priced. He is still buying this one. Likes their exposure to the US. ROE is improving. Announced a share buyback which indicates the management is comfortable with what is going on.

Trades at 10X earnings and trades at 1.6X Book. Has moved sideways for the last 1.5-2 years, earnings have gone up and so this is a good opportunity. Good growth in the US. Has made some good acquisitions in the last little while. They may conclude a deal with Aeroplan which will be very good for them. 4% yield.