In this three part series, we discuss macro risk posed to the markets by the enormous Chinese banking sector. In Part #1, we take the perspective of the ‘bears’, discussing why the sector could be the epicentre of a further global sell-off and/or additional macro uncertainty. In Part #2, we take the perspective of the ‘bulls’, providing reasons why many believe the macro risk posed by…
Insights: Research Comments
Why AGF Should Sell Itself in 2016
Since 2013, we have travelled throughout Canada giving a research presentation entitled “Canadian Banks – the End of an Era?”, which is based on an essay we wrote in 2011 (and reprinted in the Globe). In this presentation, we reviewed the evolution of the banks over the previous 20+ years and provided a 5 to 10 year outlook for sector.
U.S. Banks: Revisiting “100 Bank Mergers”, 3 Years Later
In December 2012, we published a note, entitled “100 Bank Mergers”. In the original note, we predicted that, in the following 3 years, there would be approximately 100 bank deals in the U.S. mid-cap banking sector (i.e., representing ~25% of the approximately 450 publicly-traded U.S. banks). To support this prediction, we detailed five potential catalysts in 2012: 1) Deals beget deals … and deal activity had…
For MICs, Time to Exercise Caution?
We were recently asked to look at and give our opinion on mortgage investment corporations, or MICs. Given the ultra-low interest rate environment, high yielding MICs have become a popular product among retail investors. What we found behind these high yield products was concerning to us, particularly given the potential for a generalist investor to significantly underestimate the actual credit risk of certain MICs.
Case Study: Citizens Republic (U.S. Mid-Cap Bank)
Below is our case study, Citizens Republic – A Recovering Mid-Cap Bank. The subject of this case study, which was originally written for and distributed to our clients in mid-July of 2011, is an example of a bank recovering from the most recent credit cycle. Click to Download»
100 Bank Mergers
We explain why we believe M&A within the U.S. banking sector will be one of the most significant and compelling investing opportunities in the financial services sector over the next three years, and why we expect over 100 mergers among the publicly traded banks during this time. Click to Download»
The Canadian Banks – The End of an Era (Globe and Mail)
On May 26th, the Globe and Mail featured our piece entitled, “The Canadian Banks – The End of an Era”. This article is based on material researched for our investor luncheons last fall by the same name. This “Special Comment” expands on the contents of the article with additional commentary for the benefit of our investors. Click to Download»
The Myths (and Realities) of U.S. Banking
Bank reporting season for the first quarter of 2011 is now essentially over. As we were summarizing this quarter’s aggregate results, we thought it would be interesting to discuss some significant myths in U.S. banking. Namely, we will discuss: Myth #1: U.S. Banks Continue to Struggle Myth #2: The U.S. Banking Business Model is Broken Myth #3: Bank Analyst Estimates are Relevant During a Credit Cycle…