Home Capital Group Inc T.HCG

NCIB is now 88% complete, SIB on the way?

[WBuffett1]

As of end of Aug, Home Capital purchased and cancelled 4.17 million shares

At current pace, they should be done by September, just in time for another SIB at the end of year!

Valuation gap with EQB will start to close. EQB is now trading at 1.3x of book value and HCG at 0.88x, almost 50% upside from here

[canader]

HCG to purchase upto 4,753,517 Jul 2019 786900 shares @$24.80 HCG repurchased as of (2019/08/31)   4.27Mil @19.29  Remaining NCIB: 478732 SIB:   18,181,818 shares $16.50 (2018) NCIB:  4,274,785  shares $19.29 (2019) --------------------------------------------          22,456,603 shares $17.03

[EventHorizon]

Dear all, Did any one of you try to estimate how much excess capital HCG might have for an NCIB or SIB in fall/winter? =============================================== Here are my grossly inaccurate back of the envelope musings: The net income for Q1 was 27.8M and for Q2 31.9M. Let's assume 120M for the whole year. This would mean only extra 30M or so from Oct to Dec. In 2014, HCG had a

[WBuffett1]

I think you can't get to 19.49% because there is an additional 123 million of cash in the parent company balance sheet that was not included in the CET1 calc (CET1 is only calculated for Home Trust). A couple bank reports talked about this but seems like not everyone realises this. The real CET1 is above 21%. based on my rough calc, if you assume 16.8% (which is still very high, EQB is at 13%

[EventHorizon]

Dear WBuffett1, Thank you for the added colour. The lower end estimate of 123M would be only about 8.5% of the outstanding shares at current prices. Do you think the board might assume that a NCIB might be a better option than an SIB? NCIBs in many companies often include up to 10% of the outstanding shares. At the same time, HCG should be able to cover an immediate 10% SIB as well as another 10

[WBuffett1]

I think they will need to do both SIB and NCIB because their CET1 is climbing every quarter as they earn net profit NCIB alone would take too long to reduce the excess capital. Took them 9 months to buyback 4.75 million shares, which would cost about $100 million but in those same 9 months, they will likely make over $90 million in net profits. That is why their CET1 has been climbing even though

[canader]

Can Probably expect a Divy in the not too distant future. But Divy doesn't seem to compare with SIB, and NCIB. Thoughts?

[GoodTimes17]

I think until share price > book value NCIB or SIB are more valuable to the company and shareholders.   Dividends would bring in a new pool of potential shareholders into the mix which would only add to the pressure for shorts to cover.

[YassineNoBS]

Committing to a what dividend will put pressure on the company’s cash flow and its ability to manoeuvre comfortably in the future especially that the short sellers are hiding at every corner. If they really have to get rid of their cash (pressured by some major shareholder) a special dividend would be better than committing to a monthly or quarterly dividend since once once you announce it the