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Thread: Home Capital Group (HCG)

  1. #121
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    Results out...revenue and earnings down a little but they seem to be stabilizing from Q2. They've increased the dividend by 9%. P/E of 6.5. Likely most of the downside is in, although I'm not sure what the upside is...maybe $32, so maybe 25% cap gains and 4% yield at some point in the next year. I sold out at $36.3 back in March as mentioned above but it is some of the best value on the TSX right now.


  2. #122
    HCG.TO has an ongoing P/E of 6.52, which indicates that it is undervalued. RSI(14) stands at 45.30.

  3. #123
    Senior Member humble_pie's Avatar
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    Quote Originally Posted by hollyhunter View Post
    HCG.TO has an ongoing P/E of 6.52, which indicates that it is undervalued. RSI(14) stands at 45.30.

    salut roboholly. I am wondering if you ever met a stock you didn't like though

    .
    ego borago gaudia semper ago

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  5. #124
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    I saw a chart, which I cannot find now, that plotted the short position and the change in the HCG stock price. There appeared to be almost a perfect inverse relationship between decline in the stock price and increase in the short position which is quite large now. With the stock barely above book value, absent a TO house market crash, I think it's at a floor. At some point the trade will start to reverse as the worst thing you can say about HCG is that they aren't growing which I think is largely due to shedding risk in the highly priced market.

  6. #125
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    Some interesting new news on HCG. Smells fishy...

    http://business.financialpost.com/ne...h-applications

    The Ontario Securities Commission has served an enforcement notice on mortgage lender Home Capital Group Inc. in connection with the company’s disclosure of the impact of falsified income information found on some loan applications, and remedial steps taken by the company including the suspension of brokers and brokerages.

    In a statement issued late Friday afternoon, Home Capital said staff at Canada’s largest securities regulator has reached the “preliminary conclusion” that the mortgage company “failed to meet its continuous disclosure obligations” in 2014 and 2015.

    An enforcement notice from the regulator can lead to formal allegations, but that is not always the case.

    “The company has the opportunity to respond to the notice before OSC staff makes a decision whether to commence proceedings,” Home Capital said in the statement, adding that the company “believes that its disclosure satisfied applicable disclosure requirements.”

    Home Capital began an internal investigation in 2014. It then suspended 45 brokers from September 2014 to March 2015 after discovering they had falsified income statements required for clients to qualify for mortgages.

    In mid-2015, publicly traded Home Capital disclosed that it had cut ties with the brokers after an external source told the company some brokers were falsifying borrower incomes on mortgage loan applications.

    In July 2015, Home Capital announced a drop in originations after the brokers were sidelined. The company’s share price fell 21 per cent.

    Home Capital’s statement Friday said the enforcement notice was delivered by OSC staff after the close of business on Feb. 9, and that the company intends to continue to co-operate with the regulator.

  7. #126
    Senior Member humble_pie's Avatar
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    Quote Originally Posted by Janus View Post
    Some interesting new news on HCG. Smells fishy...


    long time ago - more than a year ago - i posted a note saying that risk lenders such as HCG & a couple others in Canada, were being over-promoted in cmf forum. I said i thought canadian chartered banks were looking safer.

    to my surprise at the time, goldstone took up the same message. I can't recall anyone else.

    perhaps the fanciers of high risk lending will have their come-uppance now? on the other hand, canadian banks themselves may have reached a market price zenith. TD bank's chief economist said she sees Donald trump's proposed tax legislation favouring US exporters while harming US importers, which is not good news for Canada.

    she didn't mention canadian banks in this connection, but the big exporters are the big banks' biggest clients.

    then we have falling residential home prices. Double whammy for the banks.

    .
    ego borago gaudia semper ago

  8. #127

  9. #128
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    HCG is now basically at book value but the investigations are pretty scary. Technical support at $24.50 and $23. If it drops below $23, watch out below. If it holds, might be a good buy as long as the underlying business doesn't incur damage.

  10. #129
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    Official charges brought by the OSC on this one. 11-page PDF is public. They clearly misled investors...

    http://www.theglobeandmail.com/repor...ticle34757288/

  11. #130
    Senior Member Beaver101's Avatar
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    ^ **yawn**, at end of the day ... it's back to business as usual and nobody goes to jail. White collar crime pays.

    Everyone should be respected as an individual, but no one idolized.-A. Einstein

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