Home Capital Group Inc T.HCG

Still trading at a huge discount

[MrSilbergIeit]

HCG has gone up quite a bit the last couple of days but HCG is still massively discounted. EQB trades at 0.84x P/B and HCG is still at 0.67x but guess which firm has more excess capital? HCG. That's right, HCG had the highest CET1 ratio out of all the Canadian banks entering into this crisis. 

I think we will see HCG stock price shooting up vertically again very soon.

[Northforce13]

Why aren't you also mentioning the return on equity of each?

[MrSilbergIeit]

Because I don't think historical ROE is very relevant during a crisis. Yes, EQB is more profitable historically in terms of margins and ROE but at a time of crisis, loan provisions are toss ups. From what I know EQB has a much larger commercial loan portfolio which is riskier than residential mortgages. My guess is they will take a bigger hit in the short run? With a higher capital ratio and

[canader]

I have been following EQB for going on three years now. About the same time as HCG. As a business it seems fine. Haven't decided to bite yet. I understand why HCG had the 5 year SP perfomance it did. I don't understand why EQB has been running flat for so long other than the recent run. Doesn't compute for me. Anyone know when EQB is announcing Q1 results? Usually around same time

[Northforce13]

Well that's a good point about the commercial portfolio I guess we will see what kind of provisions they come up with

[CanadianKia]

I think it's not as crucial right now. this is a massively discounted Share right now and that's all that matters. i am not sure why anyone wouldnt jump back into this at these prices. Real Estate/banking will go back to normal in a month or so. Maybe 2. Even if its slow, it doesnt matter. its one rough quarter for EVERYONE, not just HCG.