Bank of Nova Scotia (BNS-T)

Reported today and the street was disappointed by their earnings, because BNS had bigger than expected loan-loss provisions. We're entering a credit cycle that will last up to 6 quarters where lending will slow down. BNS is the only bank he owns. The CEO has been cutting costs and he's confident in him. If you have a 3-5-year horizon, you could enter this. Growthier areas in Latin America outside Canada could propel earnings in the future.

They have gone through a difficult period of time but the new CEO is changing and re-structuring the company. This will take time. It pays a good dividend. It used to trade at a higher multiple and is now close to the Book Value so it is quite cheap.

He used to be big fans of this, given their investment in Latin America to grow. But their execution hasn't been good, and they missed going into the US. They're now in a bad part of the market. He sold this 3-4 years ago.

One he likes, with the turnaround. A good time, generally, to start looking at the banking sector to get back in.

The dividend is 7.2% so with even with a very modest stock price appreciation you could have a 10% total return. The bottom has likely been reached recently.

Management changes. Strategic plan will be announced in December. Selling stake in Canadian Tire Financial will help by adding to capital cushion. If you own now, hold, as you're getting paid to wait. 

It has more international exposure. Don't average down. Instead, use those funds to diversify. Try RY for wealth management, or TD for US retail banking. Those are the two banks he prefers.

A good company and now is a good time to buy it. It's the most international of the Canadian banks. Shares are down because of their weak Latin American markets, a new CEO transition, and a review process. High returns and pays about a 7% dividend.

Owns shares in company. Very attractive at current price. Long term prospects of business very good. Good for long term investors. 2024/25 will see mortgage turnover, but not overly concerned. 

Canadian banks don't trade at high multiples and at reasonable price-to-book. BNS is in a tough situation with a new CEO to transition the bank (cutting costs, exiting unprofitable businesses). They're in geographies that are risky. There's more downside. That said, you can buy the Canadian banks which will do well in coming years, but BNS is a different story given its restructuring.

In the next month or so, CEO will discuss changes to strategic direction. Investors worried by lower returns from international operations. Gaining market share in Canada. Yield is around 7%, dividend is fairly secure and might go up in the next few years.

December 13 is when the CEO will be unveiling the strategic plan. He's looking for word on capital allocation procedures, progress expanding market share in Canada, and how well have recent acquisitions actually done. How will they increase returns from international operations? Wants details on Sun Life deal too. Extremely attractive yield of 6.97%.

Sees downside on stock if hard landing and rising interest rates. Not expecting a major economic meltdown. Leadership not very strong the past 10 years. Hoping new management will turn the bank around. $50 share price a good place to buy. Owns small amount of shares. 

He loves Canadian banks. BNS pays the highest dividend or close to it. There's some question about the CEO change, because the new CEO doesn't come from banks. Banks are downsizing after investing in IT. BNS likes the dividend that they raised. BNS operates in Latin America, not the easiest place to do business. RY and TD have less volatility, but pay a lower dividend.

Banks are protected in this country. BNS does business in Latin America which is a trickier place to do business than North America. It will take a while for any bank here or America or anywhere to bounce back (given interest rates).