National Bank of Canada (NA-T)

Loves the Canadian banks long term. His favourites are NA and RY right now.

A leader in the sector over the last year.

Don't fight the trend. Has been the leader, continues to work. The winners continue to win, so the valuation doesn't really bother him.

A leader in the group, stick with it.

For the past 10-15 years, it's been one of the best banks, outperforming. Their purchase of Canadian Western Bank is transformative, but is a little skeptical about how synergistic the deal will be, but CWB is a good franchise and there will be some synergy. NA will do well overall.  For the next decade, NA has a smaller base to grow than TD, but their earning power will outstrip TD. That said, he would suggest only selling TD marginally to buy NA.

He has owned it for 20 years. It is the 6th largest bank in Canada but not trading at a discount to the big 5 now. In fact it is valued at second place behind Royal Bank so be wary. It hasn't been this expensive before. Banks tend to trade in a range. It bought Canadian Western Bank which is a good deal for both banks.

Hesitant on Canadian banking space in general. Mortgage reset date of 2025 hasn't happened yet, with its impact on consumer. Bulk of the bad news hasn't been taken into consideration yet. Trades at a premium, stay away. 

Market bias toward domestic-centric banks right now, so they're doing well. If she had to pick a Canadian-centred bank, she'd pick CM.

Owned for a long time, but shaken out with takeover of CWB. Premium for CWB very high. Great job with organic growth. He's a fan, and wouldn't be surprised if he bought it back at some point.

100%. Are the paying a hefty multiple? Also yes. To build what CWB has would be extremely costly and risky. This way, they're getting a great asset at a reasonable price. Great operators.

If he was going to own national banks, he'd most likely own RY or NA. And if not, then the ZWB strategy is a good one; covered calls give you more upside; yield's around 7.5%; pretty good income stream.

Not a ton of growth in the Canadian market, and not a ton of growth in Canadian banks. Own them for the income more than upside growth.

Diversified. 40% of revenues come from traditional banking, 25% from wealth management, 25% from markets, 10% from specialty finance. Focused in Quebec. Well managed. Strong growth and profitability. Outperformed peers over last 5 years. 

CWB acquisition is a good fit -- increases size materially, diversifies geographically, adds commercial and wealth management exposure. Shares trading back offers a more attractive entry point.

In terms of risk, we should be glad it bought in Canada instead of US. Banks that have gone to the US to do acquisitions have been hit and miss. CWB is a durable bank, mainly commercial which is riskier. Interest rates pivoting could certainly help commercial and real estate holdings of CWB.

Cost of capital of the small CWB always high, but now maybe growth can be unleashed as part of a larger bank.

Because of the CWB acquisition, NA has come way down, so might be a good time to buy.

Has done very well. Benefited more than others from capital markets business, as opposed to traditional lending/deposit business. Capital markets results can be lumpy and tough to forecast. Hard to argue with its growth. International exposure in Cambodia, mostly in Quebec. He prefers a more national footprint.

As for a stock split, not something he focuses on. Whether your pizza is cut into 4 pieces or 8, it's still the same amount of pizza.