AssessmentWhat is your current opinion on EQB? It had a strong run but their most recent results were not as encouraging and the stock took a hit. Do you think the issues with the last quarter were only temporary and EQB is buyable today for a new position at current levels? EQB was recently recommended by at least a couple of brokerages (including CIBC) as the Best Growth story among Canadian banks. Do you agree?
We would agree on its growth prospects vs the sector. We do like it right now, though it is hard to call whether any concerns will be temporary. Results were actually good in Q1, but not good enough for investors' high expectations. It is very cheap considering its potential rate of growth. Considering it is more than $10 lower than before its last quarter, and interest rates are closer now to declining (in Canada), we think it looks attractive today at 7X earnings. (5iResearch)