Q: Hi, What is your current opinion on EQB ? Stock had a strong run, but if I remember correctly, their most recent results were not and encouraging and 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 recommended by at least a couple of brokerages, recently ( Including CIBC), as the Best Growth story among Canadian banks. Do you agree ?
Thank You
Thank You
5i Research Answer:
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 good in the Q1, but not good enough for 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.