Bank of Montreal (BMO-T)

Traded at a premium for a long time. Three consecutive EPS misses, stock sold off, premium is gone. Provision for credit losses was higher than anticipated. More rate cuts will help health of consumer, but too many would cast doubt on underlying health of economy and that won't be good for banks.

Their problem is their loan-loss provision which increase a lot more than their peers. But there are no capital issues. You can buy on this pullback. Remember that banks understand their loan book much better than 20-30 years ago; if these provisions are not used, they go back into earnings. Buy it now; it's at book value.

He sold after their last quarter, based on problems with their US credit side with higher loan losses. They just completed a bank acquisition in recent years. They wonder if they have a handle on their new businesses. An analyst downgraded before the latest results, which are worse than expected. This will be in the penalty box for a couple of 2-3 quarters. Won't buy the dips. He bought TD instead.

Overall, quite constructive on banking sector in Canada. Valuations are reasonable, dividend yields quite high, capital bases very strong. So important to look at capital, as that determines what they can do. Well run. 

Hit hard last quarter because of its acquisition of a regional bank, which tend to be bigger lenders to commercial real estate. Investors may look at this as a show-me story. If you own it, just sit tight.

He tends to own RY, TD, and BNS.

He lightened shares recently amid disappointing earnings in recent quarters, plus they made more credit provisions. Buying the bank of the west was huge. It now ranks at the bottom of Canadian banks, but tailwinds are developing for the long terms for Canadian banks.

He'd pick BMO. All Canadian banks are in solid financial position for the most part, attractive yields, stable earnings. Would love to see higher revenue growth, better-managed credit risk, and resilience in face of current headwinds. If BMO could do that, he'd raise it from Buy to Strong Buy.

He's a long-term investor. BMO will weather the short-term noise about credit quality in the US.

Relatively cheap. Great dividend yield. Opportunity to buy. As interest rates come down, they'll do better. Issue of credit quality in US, but it has built in reserves and has lots of capital. Remember that Canadian banking operates in an incredible regulatory environment.

A lot of the US banks are growing around 10-15% and trading at lower valuations. Liked the Bank of the West purchase. Credit problems in its US business more than US competitors, concerning. Doesn't see growth in Canadian banks yet, economic headwinds, meeting ROE targets will be tough.

At some point, it gets too cheap. At $114, he'd be more a buyer than a seller.

Choppy since 2022. Broke the downtrend, but looks like that's failing. Chart's a 4/10. Potential for finding support at a recent low, but he wouldn't buy.

A very good bank. Doesn't understand why it's priced so cheaply. Would buy it right here.

He's very, very underweight the Canadian banking industry. Much prefers US banks in this environment. Canadian economy is going to underperform for a while, as we just don't have the oomph and the growth capacity that the US does. Plus, we have more of a housing issue. 

Banks had a 40-year run as interest rates fell. They sold credit, and credit's going to get tough as interest rates rise. So, being a seller of credit isn't quite as good as it used to be. With interest rates in Canada coming down, the spread opportunities just aren't what they were.

Owns shares in the company. Strong company with excellent prospects. M&A turning out very well (Canadian Western Bank). Recent disappointing earrings not a concern. Characteristically cautious on loss provisions may turn out to be too conservative. Overall, is a strong business that will continue to own. All business segments in the business very strong. 

Picking away at this name. Missed 2 quarters, increased loan loss provisions, and he expects this to continue for a couple more quarters. Short-term risk is that capital markets aren't as big in Canada as in the US. Concerns about Bank of the West acquisition timing, regional bank issues. 

Those concerns are priced in. Coming through that, valuation now more attractive, good dividend while you wait. Getting to the point where earnings should turn up in the next year or so.

Stable dividend of 5%. Increased loan loss provisions, squeezed with where interest rates are. Opportunity in Canadian banks, but she favours RY. More revenue coming for all banks in Q4 and 2025 with mortgage renewals. Ranks 8/10 on fundamentals.

Lagged. Had to increase credit provisions more than was expected. Not her top pick in the sector (see RY and TD), but owns it in some client portfolios for income. In US, economy slowing and competition for deposits is intense. Longer term, solid income name; near term, choose elsewhere.