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Thread: Home Capital Group (HCG)

  1. #31
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    With all of the negative energy news, I thought I'd spice it up with HCG's quarterly results.

    http://www.homecapital.com/press_rel...%20Release.pdf

    Summary: Earnings up 10% again (15% when comparing YTD over a year ago), and the 3rd dividend increase in the last 4 quarters. Dividends are up 43% over a year ago. Trading just below it's all time high, although definitely at a premium to its historical valuation. Still only paying out 19% of net profits in the last quarter. And originations seem to be up quite sharply (28%!), that will be very positive for future growth, especially with net interest margin ticking upwards.


  2. #32
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    Nice call doctrine. I'm too late to the party me thinks....at 52-week high.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  3. #33
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    Looks like the market wasn't thrilled with the sold HCG results. Down about 5%.TD downgraded

    http://business.financialpost.com/20..._lsa=b163-e169

    The big banks and lifecos are probably cheaper right now, but I'm glad I own this stock.

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  5. #34
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    It got a little expensive at $55, not surprising it's coming back down to a more reasonable valuation. As a shareholder that got in at $26 (split adjusted), I'm still very, very happy with the performance of this company.

    Dividend growth rate crushes the banks.

  6. #35
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    With the pullback, foward P/E is at 10.7. Good time to start a position?

  7. #36
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    Would like to see under $45 myself.
    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  8. #37
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    I would say that under $45 would be a buying opportunity for sure, especially if it ever approaches a trailing P/E of 10 (closer to $42, which is a 2% yield as well). I'm happy to be holding at a cost basis of $26 - 3.1% yield on my original shares now to the huge dividend growth. Not really surprised by the pullback, but I was very impressed by the very strong growth in their report - 29% growth of originations is just huge, and 2-3 times faster than other banks. Oaken Financial will also be a huge source of cheap capital for them as well - $2B in deposits already.

  9. #38
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    Kind of funny that you guys (doctrine and CPA) have a cost base of $26. That's what mine is as well. Unless the housing market crashes and people pile out of this company as a result, I'd be surprised if we see more than a 20% decline in this name from the current closing price of $51.60. $47 would be a decent buy if it drops that far. That would put it at a slight discount to the big 5 banks.

  10. #39
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    Not quite 20% decline yet, but 15%+ decline right now since I last posted. To those who were saying it's a buy if it goes below $45, are you guys looking at this name? My take is that some of the big banks (i.e., BNS and TD) are trading at lower valuations on a P/B basis, so HCG is still trading at middle valuations relative to the big banks. However, you can't argue HCG's ROE track record. Perhaps this pullback is due to concerns of sluggish consumer borrowing? Thoughts?

  11. #40
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    I've been watching, took a big loss (-6%) today. It looks as though "short Canada" is having a revival with the decline of oil and a recent news tidbits about Canadian debt levels and the housing market. An article I read in the G&M just today mentioned that Bank of America listed "short Canadian banks" as a top trade in 2015. HCG's mortgage exposure is heaviest in Ontario, which is looking like a province set to benefit from the oil crash. Misplaced negative sentiment is hardly new, though.

    Under $40 is where I would add to my position. I'm not eager to average up unless it really pulls back.


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