Q: What do you think of the news from TD this morning, selling their stake in Schwab and using the money to buy back $5.6 billion of their shares? The market certainly seems to like it
5i Research Answer:
TD was under so much pressure and scrutiny with its anti-money-laundering fine that it became very cheap and sentiment was all negative. As we mentioned in a prior answer, it would not take much positive news to move the stock. We see the news as good, and it cleans up the corporate structure a bit. The $8B (C$) share buyback will certainly help support TD's share price. It is also a 'sign' that the new CEO (only started 10 days ago) means business in his role of cleaning up the bank.