So guys I phoned my royal bank advisor friend. This is the same guy that helped me before with td and I wanted to know what he thought now.
In short he is disappointed. He was also expecting that td would recover to $100 after AML settlement but the facts that came out plus the asset cap/monitoring is a big headache to deal with. He was saying that there were some good things and some bad. Good points were that there were only 3 scenarios of money laundering. The way TD AML was running it was a joke and he was saying that TD is just very lucky that this is all that happened. Bad were that after the settlement there are numerous questions and numerous issues that td has to deal with
I told him about my situation and quite frankly he said that at this time TD is not a stock you can invest in. The people that bought at 90 or 100 then perhaps they hold or average down in the 60s but for me he said I should just sell and move on. Td is going to be in the doghouse for years to come (easy 3 to 5 years) and td has always been slow and this AML remediation will be slow as well plus they are also dealing with US govt. Without a doubt their earnings will take a hit. He was saying that with the way selling was done over the past few days TD will go to low 70s easy and as earnings get affected he says it could come down to low 60s. Perhaps even mid 50s if economy or market turn bad. At this point I was like wow and told him royal just put a target price of 82 just yesterday and he said it will be reduced as time goes by or when td does it's earnings release. His reasoning behind this was that right now expectations for td eps are around 8 per year and no way td is getting more than a PE of 9 (which is what scotia had before) so that 72 (9x8). Plus after you factor in low eps with more years and you start seeing low to mid 60s. There will be far better opportunity to buy a few years from now. Big institutions will sell as some of the large investors have been holding for years or decades and they are sitting on so much profit that even 80 price was good for them. He was saying even 70 is a good for them. It remains to be seen what Td can do and how they handle AML remediation and how the new ceo performs but for now there are more questions than answers and that uncertainty will drag the stock lower.
Dividend is safe but my friend doesn't think td can maintain the same dividend growth (best case 5%) but he thinks it will be 3% to 5% growth instead of the 7% to 9% which td have done in the past. This would also put pressure on the stock price. He doesnt think td will be buying their shares at all for 3 years or until the AML matter is almost done.
At this time he suggested bns and cibc for banks. He can't say anything about ry and he is a little weary on bmo. And NA stock performance has been as good as RY. So there you have it guys. This is the nuts and bolts of it. I am so out. I won't even hesitate in selling even at 75 on Tuesday. It's a big big disappointment for A LOT of people. Good luck everyone