The recent Home Capital transparency issue, and now the downgrade from Moody’s on Canadian Banks has supressed valuations recently. We personally have GIC’s with Home Trust that are coming due. Although we don’t envision investing in the Company, (once trust is an issue) we do anticipate adding to our CIBC and Genworth positions. Canadian Banks and non-sub prime lenders do a great job of valuing risk, even in this environment. Canadian banks do not write risky loans, you’d know if you’ve ever tried to borrow from them. Hence we see this as a buying opportunity.
Tip Sheet
CIBC (CM) Close 107.29
P/E Ratio 9.1
Book Value 1.8
Debt to Capital 4%
Dividend 4.73%
Genworth Mortgage Insurance (MIC) Close 33.48
P/E Ratio 7.1
Book Value .8
Debt to capital 10.3%
Dividend 5.26%
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