Canadian Western Bank

CWB-T

TSE:CWB

33.50
0.06 (0.18%)
The Canadian Western Bank is a bank that is based in Edmonton, and which operates primarily in western Canada. The bank serves personal and commercial clients in Western Canada.
More at Wikipedia

Analysis and Opinions about CWB-T

Signal
Opinion
Expert
BUY WEAKNESS
BUY WEAKNESS
June 13, 2016

The correlation with this bank and energy prices, etc. is what this bank is all about. It is a proxy for Shorting the energy sector. He doesn’t like this one at this time. Expects oil to hit $40 before it hit $60, and therefore potential weakness. Can see a probable 10% downside, at which point he would think about buying if you want a longer-term play on the recovery story of Fort McKenzie.

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The correlation with this bank and energy prices, etc. is what this bank is all about. It is a proxy for Shorting the energy sector. He doesn’t like this one at this time. Expects oil to hit $40 before it hit $60, and therefore potential weakness. Can see a probable 10% downside, at which point he would think about buying if you want a longer-term play on the recovery story of Fort McKenzie.

TOP PICK
TOP PICK
June 10, 2016

*SHORT* His concern is driven by what happened with them in the last downturn. It took 8 quarters from the start of the last recession before impaired loans peaked, and 17 quarters to get down to the pre-recession levels. We are only 4 quarters into that, and he sees a tripling of their loan provisions coming forward, and another 3.5 years ahead. Dividend yield of 3.45%.

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*SHORT* His concern is driven by what happened with them in the last downturn. It took 8 quarters from the start of the last recession before impaired loans peaked, and 17 quarters to get down to the pre-recession levels. We are only 4 quarters into that, and he sees a tripling of their loan provisions coming forward, and another 3.5 years ahead. Dividend yield of 3.45%.

COMMENT
COMMENT
June 2, 2016

Just reported in the last day or 2. People were looking for really bad news, and he feels they surprised the street by coming out with much better results than expected. Although provisions for credit losses went up to 78 basis points from 18 last quarter, it wasn’t as bad as people thought it could be. You have to ask yourself if you want to ride out the fact that they are an Alberta-based bank in the current environment, when you can get a better yield at competitive pricing with their larger competitors. He would rather take the yield advantage of some of their peers. (See Top Picks.)

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Just reported in the last day or 2. People were looking for really bad news, and he feels they surprised the street by coming out with much better results than expected. Although provisions for credit losses went up to 78 basis points from 18 last quarter, it wasn’t as bad as people thought it could be. You have to ask yourself if you want to ride out the fact that they are an Alberta-based bank in the current environment, when you can get a better yield at competitive pricing with their larger competitors. He would rather take the yield advantage of some of their peers. (See Top Picks.)

BUY
BUY
May 31, 2016

(Market Call Minute.) This is the most sensitive when rates go up. It is one you want to own, but you have to have a bit of patience.

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(Market Call Minute.) This is the most sensitive when rates go up. It is one you want to own, but you have to have a bit of patience.

DON'T BUY
DON'T BUY
May 25, 2016

His macro view is that structurally energy could be tough for a longtime. He does not like something that is broken and that you hope is fine. He prefers outside of Western Canada.

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His macro view is that structurally energy could be tough for a longtime. He does not like something that is broken and that you hope is fine. He prefers outside of Western Canada.

WAIT
WAIT
April 28, 2016

(Market Call Minute.) Hold off on this for another couple of quarters until you see if the Alberta Renaissance gets a little better. Would prefer Toronto Dominion (TD-T) right now.

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(Market Call Minute.) Hold off on this for another couple of quarters until you see if the Alberta Renaissance gets a little better. Would prefer Toronto Dominion (TD-T) right now.

COMMENT
COMMENT
March 31, 2016

Preferreds, Series B. They had to issue them with quite a high interest rate. Shareholders of previous issues want to sell and buy this one.

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Preferreds, Series B. They had to issue them with quite a high interest rate. Shareholders of previous issues want to sell and buy this one.

DON'T BUY
DON'T BUY
March 10, 2016

The banks are all quite attractively priced. She likes her Top Pick today as well as TD-T for their US exposure. CWB-T is exposed to Western Canada.

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The banks are all quite attractively priced. She likes her Top Pick today as well as TD-T for their US exposure. CWB-T is exposed to Western Canada.

COMMENT
COMMENT
March 1, 2016

Tough going right now out West, and as a result banks lending primarily to Western provinces are having some troubles. Historically a very well-run company, solid business and diversified, but in the current territories they are in a bit of trouble. Stock has been beaten down a long way. From a loan loss point of view, you can expect to see some losses showing up. He would prefer to see a bottoming in the Western economy before he got aggressive on this.

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Tough going right now out West, and as a result banks lending primarily to Western provinces are having some troubles. Historically a very well-run company, solid business and diversified, but in the current territories they are in a bit of trouble. Stock has been beaten down a long way. From a loan loss point of view, you can expect to see some losses showing up. He would prefer to see a bottoming in the Western economy before he got aggressive on this.

Jim Huang

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Price
$20.480
Owned
Unknown
COMMENT
COMMENT
February 8, 2016

This bank had a great run over the previous 10 years, but has gone through a rough patch recently. He is Short this, largely because of its exposure to Western Canada. Thinks there is a rough patch coming. If you look at how they performed in 2008-2009, a lot of the provisions really didn’t come in until late 2009, and carried on until 2011. Feels the market is not anticipating some of the issues they are going to have. Also, in the last conference call, they have a very substantial “preferred share book” which has been very hard hit. They did not take a write down to that portfolio, but it they wrote it down to its current market value, it would essentially wipe out at least the last quarter if not more in terms of earnings. He can still see a 10%-20% downside.

Show full opinionHide full opinion

This bank had a great run over the previous 10 years, but has gone through a rough patch recently. He is Short this, largely because of its exposure to Western Canada. Thinks there is a rough patch coming. If you look at how they performed in 2008-2009, a lot of the provisions really didn’t come in until late 2009, and carried on until 2011. Feels the market is not anticipating some of the issues they are going to have. Also, in the last conference call, they have a very substantial “preferred share book” which has been very hard hit. They did not take a write down to that portfolio, but it they wrote it down to its current market value, it would essentially wipe out at least the last quarter if not more in terms of earnings. He can still see a 10%-20% downside.

COMMENT
COMMENT
January 12, 2016

Because of its geographic concentration, and that all of the banks have underperformed, she would rather buy one of the larger ones. Dividend yield of 4.4%.

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Because of its geographic concentration, and that all of the banks have underperformed, she would rather buy one of the larger ones. Dividend yield of 4.4%.

BUY WEAKNESS
BUY WEAKNESS
January 4, 2016

Earnings expectations set it at 8.6 times, which is very low. But there could be another 10% down in the stock if oil stays low much longer. It is an energy trade and will recover proportionately if oil does. You could nibble away here.

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Earnings expectations set it at 8.6 times, which is very low. But there could be another 10% down in the stock if oil stays low much longer. It is an energy trade and will recover proportionately if oil does. You could nibble away here.

COMMENT
COMMENT
December 30, 2015

Has been punished because everybody thinks that every loan in Alberta is going to go under. That just isn’t the case. You are buying this at about 8X earnings compared to other bank stocks where you are paying 10X or 10.5X earnings. You’ll get a 1% multiple bump over a 5-7 year period, and you are probably going to get a nice growth bump, because the earnings that are not going down will show enhanced growth as Alberta recovers. This is exactly what a contrarian investor would be looking at. Dividend yield of 3.8%.

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Has been punished because everybody thinks that every loan in Alberta is going to go under. That just isn’t the case. You are buying this at about 8X earnings compared to other bank stocks where you are paying 10X or 10.5X earnings. You’ll get a 1% multiple bump over a 5-7 year period, and you are probably going to get a nice growth bump, because the earnings that are not going down will show enhanced growth as Alberta recovers. This is exactly what a contrarian investor would be looking at. Dividend yield of 3.8%.

DON'T BUY
DON'T BUY
December 10, 2015

It has not had a good year and is less expensive now. The problem is the exposure to lending in Western Canada. There were not a tremendous amount of debt restructurings in 2015 so he is cautious the longer oil stays low.

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It has not had a good year and is less expensive now. The problem is the exposure to lending in Western Canada. There were not a tremendous amount of debt restructurings in 2015 so he is cautious the longer oil stays low.

DON'T BUY
DON'T BUY
November 25, 2015

(Market Call Minute.) This has suffered from a slowdown out West. It is the middle of the pack for him. Has an okay yield. There is no compelling reason to own this when some of the other banks are trading at some of the same valuations.

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(Market Call Minute.) This has suffered from a slowdown out West. It is the middle of the pack for him. Has an okay yield. There is no compelling reason to own this when some of the other banks are trading at some of the same valuations.

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