Investment Q&A

Q: The BMO cl B were bought Dec 2014 and have dropped significantly. In the mail we received the option to convert shares into non-cumulative floating rate... Is this a good thing to do? What is the advantage to convert? They are held in a registered account. Are there any other options to recoup our loss. Thanks

Q: There is a report in the G&M today that it may be time to trim BMO as it may be a little over priced now based on its historicals. Interesting I was thinking the same a few days ago and am contemplating selling my holdings. I have not yet sold as I really don't see much to buy at this point from an income perspective. Thoughts on BMO and possible stocks to rotate into? Thanks in advance.

Q: Good morning,

I am looking to find the relative exposure of the big 5 banks to the oil and gas sector. I understand that thus far that the effects of the downturn in the oil patch have been somewhat benign, but it would be helpful to know the potential relative effects of a protracted low oil price on the respective banks (ex National and Cdn Western) based on their exposure to the sector. As well, could you please pass along the bank that you feel is most insulated.

Thank you for your response,
Brad

Q: Hi Guys,

I am an income oriented investor with the following financial stocks:

Bank of America (BAC)
Bank of Montreal (BMO)
Genworth Canada Inc (MIC)
Gluskin Sheff (GS)
Royal Bank (RY)
Sun Life Financial (SLF)
Toronto Dominion Bank (TD)

They all represent roughly equal value in my portfolio and are all within my minimum and maximum allocation. The overall financial area is within my global limits. I have no additional cash to invest. I have the following questions:

1)Would you sell any?
2)If you would make a sale, how would you replace it in the financial area?
3)Do you see more than a 10% chance of a dividend cut in the next 3 years for any stock?
4)Any other comments would be appreciated.

Please charge 2 credits due to the number of securities involved.

Thanks
John

Q: In light of possibly declining rates in Canada and the possibility of further turmoil in the oil business, can you provide your thoughts on this year's performance for the banks

Q: Interesting in your view of CDN banks? Are you seeing value? They are looking like decent value to me and going into some seasonal strength. BMO has been under the radar a bit but appears to have some upside with the new purchase etc. What's your opinion on BMO?

Q: BMO beat earnings but could you share (1) what you think about their outlook? (2) Do you think the 'tapped-out' consumer theory will die considering that aspect of their revenue actually did well? (3) Do you think that even if all banks beat earnings this quarter, the market move the sector back up? Thanks for your work. Intense week.

Q: The BMO shares are down over $1.00 at the moment, far more than the other banks. Yet BMO raised their dividend and the results for the quarter slightly beat expectations. Why the drop in value?

Q: Charlie asked about brokerages and you mentioned TD but did not mention BMO. I have a BMO Invest account and trade unlimited shares for $9.95. BMO also provides top notch reports plus excellent information on any stock I may be considering. I believe BNS has a similar service.

Q: What is your outlook for Canadian bank stocks for this year? Tx

Q: I keep wondering why so many pundits, including you, seem to prefer BNS and TD to the other banks. I have positions in all the major banks and, on checking my holdings, see that BNS has not moved in a year while BMO is up over $11 a share since last January. Your thoughts?

Q: On the 5 safest Canadian stocks outside of utility and energy companies question of Oct.22, I was surprised to not see any financials included. Do you not feel a bank like BMO which has paid dividends for some 200 years would make the cut, and if not, why? 3 choices in consumer staples seems under-diversified. Thanks, J.

Q: I have positions in all the major Cdn banks and I wonder why you, and many other advisers, tout TD and BNS over the other banks. When I started with BMO Invest in June '13, BNS was $59.04 a share and BMO was $61.37 Yesterday BNS was $72.94, a nice $13.90 increase, but BMO was $85.42, up $24.05! Why does BMO never get the recognition it deserves?
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Q: I am wanting to reduce the number of holdings in the financial sector. Could you please rank the following in order of preference: BMO, BNS, NA, RY, CF, HCG, GWO, IFC and SLF.

Q: We have positions in the major banks and are wondering why BMO fell so much recently and has not recovered as well as CM, RY, TD and BNS. It holdssubstantial US assets and I feel that the strong US dollar should be a boost for it, compared to BNS, for example.

Q: Hi guys. Any comment on the BMO earnings? Are any other new bmo earnings estimates published? I see CIBC has a new Bank of Montreal report this morning with 2014 eps estimate of $6.27 and 2015 estimate of $6.75. On a $69.95 share price that gives us p/e of 11.15 for 2014 and 10.36 for 2015.

I know, of course, these earnings estimates can always be adjusted, but all things equal the valuation doesn't look too bad sub $70 in my opinion. What are your thoughts? Thanks, as always.

Q: I am going to buy one of the following banks...National, TD, BMO, CIBC or BNS. Any frontrunners in the group and what do you expect dividends to do in this grouping?

Q: I see that BMO has taken a big hit today, but I can find no reason for it. Your thoughts?

Q: I have BMO in my tfsa and BNS in the wife's. The pundits always praise TD and BNS when suggesting bank investments but never mention BMO, yet it consistently has outperformed BNS, and pays a better dividend. Any ideas why BMO never gets the credit?

Q: Based on BMO's just released earnings, would you consider it a good buy at this level ?