RE:Looks Like A Sure Winner Yousry mentioned in the CC they will consider dividend and NICB probably Q4 2018 so hang tight!
Their net interest margin is pretty much back to pre-crisis level. They increased their GIC rates towards end of Q4 as they are anticipating increased origination levels in Q1. Yousry said in the call that originations are ramping up month by month. They are taking it slow so they can match the mortgage and GIC schedules. Smart and probably necessary move given the liquidity crisis was mainly caused by a mismatch in the schedules.
Looks like B20 could be a positive for HCG after all. HCG is seeing positive increase in the quality of borrowers.
In terms of valuation, I would look at P/B. It is still trading at a huge discount to book which doesn't make sense. The book value means that if they stop making new loans and let the mortgage loans to roll off their balanace sheet, after paying back all the deposits/liabilities, the equity shareholders get $23 a share. Of course there is time value of money so i would maybe put a discount of 10%, the current share price is still a huge discount to that. So yeah, the current valuation doesnt make sense. I am buying more today.
Stooge wrote:
Where have the serious commentators gone? All I see now are these doomsday analysts with their overly dramatized posts.
I'm in for the future dividend. Expect steady recovery quarter on quarter in a challenging loan environment. They are over funded so lots of capital is not being employed. If Q4 earnings are annualized we have a P/E of about 11. If earnings improve, it's your guess for the price of HCG following Q3 2018 results.