Wells Fargo (WFC)

Very attractive right now, but will be more attractive in the future. Probably the most defensive of the big money centred banks, but also has the highest multiple. He would avoid this for a little longer.

One of the largest originators of mortgages. Very stable loan book, and growing loans reasonably well. He has been looking for a steeper yield curve. We don’t have this because people are not very confident about the economic outlook or that the federal reserve is actually going to raise rates. If you take a position, over time you are going to see an ability for them to utilize their balance sheet, and it will be very, very profitable.

Historically US banks bottom right around this time of year. What you want now are the technicals to support that. There are some early signs that this might want to be bottom at around current levels. Has been slightly outperforming the market, which has been going down. Probably slightly higher than its 20 day moving average, and momentum indicators are probably starting to show early signs of bottoming. Probably a good time to be considering this as an interesting seasonal play right through until approximately May.

More focused on meat and potatoes banking. Confidence is shaky, but the ability for the US consumer to spend is significant. Household debt is about 110% of income vs. Canada at 165%. It is not a buy, but a hold. He prefers regionals such as COLB-N, who are better at cross selling banking products.

An incredible company. Trades at a premium to all the rest of the US banks, but you are paying for a great company. Good dividend yield of 3%. Trading at 1.4X Book and 11X earnings. Have done a very good job of growing their product line.

Another name that is having a real difficult time in the recent market turmoil. We need these financials to start going, because it has been frustrating to see this continual decline. What they have going for them is that 100% of their revenue is US. 3.1% dividend yield.

A play on the housing recovery. Loan growth and credit quality are both up. As interest rates rise, these banks will make a lot more money than the market is anticipating.

(A Top Pick Jan 13/15. Up 0.35%.) One of the highest quality banks to own for US domestic exposure. Very well-run. Even during the financial crisis, they never got to the problems that the other big institutions did. Attractive yield and are continuing to increase the dividend.

(Top Pick Jun 25/15, Down 9.58%) It outperformed the market last year. He is not worried that they were down in the last 6 months. This is for buy and hold for a long time.

He likes it on a valuation basis. They don’t have a big risk profile. They took a lot of hits already. They will take advantage of the rising rates in the US. He owns C-N, but any of the big money center banks are okay with BAC-N being the most risky.

Would have thought that money centred banks would have performed a lot better than they had this year. He likes this bank and thinks it is a good, long term play. It is very exposed to mortgages, but mortgage losses are not occurring anytime soon.

The largest lending institution in the US. Lending is growing rapidly in the US.

This represents an opportunity to participate in the housing recovery. In terms of mortgage origination, they are the largest in the US. Loan originations are growing reasonably well. We have really only seen a tepid growth in the housing market, and when that really starts to move this bank is going to do quite well.

(There was no discussion on this.)

There are probably some better growth prospects with isolated regional names in certain specific states, but among the national players this would probably be his favourite. They are zoned in to the retail banking side of things. The overall economic recovery in the US, housing and jobs recovery, should benefit this bank more than other national players.