Scotiabank raises dividend following profit jump in Q1

Scotiabank, formally known as the Bank of Nova Scotia (TSE:BNS, Mkt cap 70.05B, P/E 10.13, Div/yield 0.70/4.88, EPS 5.67, Shares 1.20B) is Canada’s third-largest lender by assets. Today Scotiabank raised its quarterly dividend 2.9% to 72 cents a share after posting a 5% jump in fiscal first-quarter profit, the Financial Post reports.

Net income for the period ended Jan. 31 climbed to $1.81 billion, or $1.43 a share, from $1.73 billion, or $1.35, 12 months previous, the Toronto-based bank revealed in a statement.

Scotiabank raised quarterly dividend

Scotiabank raised its quarterly dividend 2.9% to 72 cents a share after posting a 5% jump in fiscal first-quarter profit

Adjusted to exclude items, Scotiabank said it earned $1.44 a share, surpassing the $1.42 average estimate of 15 analysts surveyed by Bloomberg.

“We delivered strong earnings to start 2016 with solid top line growth in both our Canadian banking and our international- banking businesses,” Chief Executive Officer Brian Porter said in the statement. “Mexico, Peru, Chile and Colombia continued to deliver robust loan, deposit and fee growth.”

Loan-loss provisions, or money the bank sets aside to cover bad loans, rose to $539 million from $463 million a year earlier. Scotiabank said the increase was, in part, due to higher provisions in the oil and gas sector.

The performance of Canada’s big banks in the first fiscal quarter of the year has been decidedly mixed. Last week, the country’s largest lender by assets, Royal Bank of Canada, reported flat results that fell short of analyst expectations, with returns diminished by the fallout from lower oil prices.

Toronto-Dominion Bank, second-largest by assets, also fell short of analysts’ expectations. Meanwhile, Bank of Montreal and Canadian Imperial Bank, fourth and fifth in size respectively, posted higher-than-expected earnings.

Scotiabank said earnings in its Canadian banking operations rose 7% to $875 million in Q1, while international banking earnings rose 21% toC$505 million. Global banking and markets results fell 9% due, in part, to higher loan-loss provisions.

“The Bank’s diversified business model has delivered growth despite continued volatility in the markets and some moderation in select areas of our operations,” Ported added.

The Bank of Nova Scotia, also known as Scotiabank, is a Canadian diversified financial institution, based in Toronto. The Bank offered a range of financial services, including retail, commercial, corporate and investment banking to more than 21 million customers in more than 55 countries around the world. Scotiabank has 4 business segements: Canadian Banking, International Banking, Scotia Capital and Global Wealth Management. The Canadian Banking segment provided a range of banking and investing services to more than 7.7 million customers across Canada, through a network of 1,190 branches, 3,869 automated banking machine (ABMs), as well as telephone, Internet banking and third-party channels. International Banking includes Scotiabank’s retail and commercial banking operations in more than 55 countries outside Canada. Global Wealth Management (GWM) consists of wealth management insurance and Global Transaction Banking businesses. More from Reuters

What is Successful Investing? Learn more here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Market Outlook & Top Picks – BNN Market Call Tonight, Feb. 4, 2016

BNN Market Call Tonight – Market Outlook

Investors’ concerns came to the forefront during the first month of 2016 as many of the global stock markets posted negative returns. Fears of slowing economic activity precipitated much of this sell-off as indications of weaker conditions in China and more countries adopting negative interest rate policies (notably Japan), less than anticipated economic indications from the US and a technical recession in Canada appeared to corroborate this negative sentiment.

In this environment, industries are transitioning as many companies face economic hardship. Within the energy and metals markets, producers have cut back capital expenditures, reduced expenses and lowered or eliminated dividends to a significant degree. Consolidation is beginning to occur within these industries along with increasing asset dispositions at distressed prices. Fiscal realities will eventually cause Saudi Arabia and other large oil producing nations to come to terms with continuing to feed oversupply while running massive budgetary deficits. These actions will serve to re-balance supply/demand factors along with the reduced supply stemming from the lower level of capital expenditures.

As we enter the next reporting period, the effects of the strong US dollar will be reflected in the profitability of US companies doing business abroad. Margins will also come under pressure as wage demands increase while low inflation undermines the ability to increase prices, especially with growing substitution from countries with weaker currencies. Business leaders will be prompted to devote more capital to research and development to regain longer-term competitive advantage.

In Canada, the effects of the downturn in the energy and mining sectors are still reverberating throughout the economy. We have seen a pull back in the prices of securities in the financial, consumer discretionary and other sectors that could be further impacted by the fallout. Some relief was evident from the neutral stance of the energy royalty review announced by the Alberta government in the face of current conditions. We can only hope that the federal and other provincial governments will exercise similar restraint. At the federal level, we enter this period in a strong fiscal position.Canadian industry should derive some benefit from the weak Canadian dollar to the extent that they export products and services.

During this time of transformation, investors have the opportunity to reposition their portfolios and invest in those companies with the financial and managerial wherewithal to take advantage of current conditions and prosper.

Michael Sprung BNN Market Call Interview Market Outlook Top Picks

Michael Sprung BNN Market Call Interview: Market Outlook and Top Picks

BNN Market Call Tonight – Top Picks:

Bank of Nova Scotia, BNS-T, Owned personally and by clients, Last Purchase December 23, 2015 $57.16

The Bank of Nova Scotia is the most international of the Canadian banks with branches in the Caribbean, Central and South America. The Canadian banks have been impacted by the recent volatility in the markets. BNS is now selling at levels that long term investors should find attractive as the premium valuation has fallen. The dividend yield is now greater than 5%

ARC Resources Ltd, ARX-T, Owned by clients, Last Purchase December 17, 2015 $15.95

ARC Resources Ltd. is a Canada-based oil and gas company. The company’’s business activities include the exploration, development and production of crude oil, natural gas and natural gas liquids in five core areas across western Canada. The Company is also engaged in the Sunrise gas plant construction. Its operations are focused in five core areas across western Canada. ARC Resources has a strong balance sheet. The shares currently yield 6.6%.

HudBay Minerals Inc., HBM-T, Owned Personally and by Clients, Last Purchase December 23 2015 $5.71

HudBay Minerals is one of Canada’s leading producers of zinc, copper and precious metals with operations in Canada, Peru and the US. Constancia, a major copper-molybdenum-silver mine in Peru, has been ramping up production over 2015. It is expected that recoveries will improve as mill throughput and head grades have exceeded expectations. With other projects coming on stream over the next few years, we anticipate that valuation levels will increase.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Bank of Nova Scotia sets lofty growth targets for Pacific Alliance

Canada’s third-largest bank, Bank of Nova Scotia (TSE:BNS, Mkt cap 64.11B, P/E 9.39, Div/yield 0.70/5.26, EPS 5.67, Shares 1.20B) has set double-digit growth targets in four Pacific Alliance countries, the Financial Post reports.

Bank of Nova Scotia Pacific Alliance

Bank of Nova Scotia sets lofty growth targets for Pacific Alliance

The lofty growth objectives for Mexico, Chile, Colombia and Peru are at odds with recent market volatility and low oil and commodity prices.

Dieter Jentsch, group head of international banking at Bank Nova Scotia, said the optimistic outlook of central bankers in those countries played a large part in the bank setting the targets.

“Our growth rates are in line with what the central banks are forecasting. It has moderated from historical growth, but is at levels that will allow us to operate pretty successfully,” Jentsch said.

Scotia forecasts that it earnings from Peru will increase by 10 to 12%, despite it – like Chile – being exposed to mining and commodity prices.

“It does have a large mining industry, but this year’s GDP will be enhanced by 100 to 140 basis points, notwithstanding the reduction in commodity prices, because they have three large mines coming on production and the costs of production are low,” Jentsch said last week during a conference call with the media.

He highlighted how Scotia has long had a presence in the Pacific Alliance countries, allowing it to build established partnerships and processes as a means to help the bank “flag” potential risks.

Jentsch stressed that the job of the bank is not to avoid risk but to manage risk, claiming that “we have the proper risk appetite and systems in place to be very effective and successful.”

He suggested that the single biggest opportunity for Scotia lies in Mexico, due to its large economy and a banking penetration of less than 40%.

The Bank of Nova Scotia, also known as Scotiabank, is a Canadian diversified financial institution, based in Toronto. The Bank offered a range of financial services, including retail, commercial, corporate and investment banking to more than 21 million customers in more than 55 countries around the world. Scotiabank has 4 business segements: Canadian Banking, International Banking, Scotia Capital and Global Wealth Management. The Canadian Banking segment provided a range of banking and investing services to more than 7.7 million customers across Canada, through a network of 1,190 branches, 3,869 automated banking machine (ABMs), as well as telephone, Internet banking and third-party channels. International Banking includes Scotiabank’s retail and commercial banking operations in more than 55 countries outside Canada. Global Wealth Management (GWM) consists of wealth management insurance and Global Transaction Banking businesses. More from Reuters »

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

BNN Market Call Interview: Market Outlook and Top Picks

Market Call Outlook

Investors’ concerns have been evident as the volatility of the global markets has increased over the recent past. Those concerns have been exacerbated by intense coverage by the media of the many global calamities that are ongoing. New shocks to the market have appeared as investors’ attention is shifted between the ongoing debt problems in the European Union, mass emigration from unstable regimes in the Middle East across the Mediterranean, the sudden decline in the Chinese market with implications of a slowing domestic economy, ongoing fears of Russian hegemony in the Ukraine, territorial conflicts in the South China Sea, etc. Nearer to home, the Canadian economy continues to adjust to the impact of fallen commodity prices, particularly energy, and the subsequent ripple effects throughout the economy. Investors have also been captivated by trepidation and uncertainty as to the effect that a raise in interest rates may have on the currently more robust US economy, when and if such a rate hike occurs.

Given that until recently, the markets have exhibited little sign a correction since the financial crisis of 2008, we believe that the current volatility is a natural outcome of wavering economic conditions in conjunction with the unsettling geopolitical issues. Arguably, valuations had become a little rich and we are now going through an adjustment that is a natural phenominom of market cycles. These adjustments are rarely smooth or quick.

It is during these periods that investors should be seeking opportunities in companies that ultimately benefit from the calamity caused by current conditions and in fact prosper from their ability to take advantage of their weakened competitors.

Michael Sprung Interviewed by Mark Bunting on BNN

Market Call Top Picks

Bank of Nova Scotia

The Bank of Nova Scotia (TSE:BNS, Mkt cap 71.13B, P/E 11.07, Div/yield 0.70/4.75, EPS 5.32, Shares1.21B) is the most international of the Canadian banks with branches in the Caribbean, Central and South America. The Canadian banks have been impacted by the recent volatility in the markets. BNS is now selling at levels that long term investors should find attractive as the premium valuation has fallen. The dividend yield is now 4.7%.

Canadian Natural Resources

Canadian Natural Resources Limited (TSE:CNQ, Mkt cap 31.26B, P/E 19.85, Div/yield 0.23/3.22, EPS 1.44, Shares 1.09B) is one of Canada’s leading senior producers of oil and gas. In the current environment, investors should be positioning their exposure in the energy sector to the stronger, better managed firms that have the wherewithal to survive through the downturn and take advantage as weaker companies are forced to dispose of assets or sell at bargain prices. CNQ has an enviable balance sheet and extremely well regarded management. The recent falloff of the stock price presents a good place to establish an initial position in this company.

HudBay Minerals Inc.

HudBay Minerals Inc.(TSE:HBM, Mkt cap 1.49B, P/E 52.67, Div/yield 0.01/0.32, EPS 0.12, Shares 235.23M) is one of Canada’s leading producers of zinc, copper and precious metals with operations in Canada, Peru and the US. Constancia, a major copper-molybdenum-silver mine in Peru, will be is currently ramping up production. HudBay has a number of projects coming on stream over the next few years, we anticipate that valuation levels will increase.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that clients gain from our focus on the long-term fundamentals and not chasing short-term trends. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Bank of Nova Scotia Beats Profit Expectations In Q2

Bank of Nova Scotia (TSE:BNS, Mkt cap 80.74B, P/E 11.72, Div/yield 0.68/4.08, EPS 5.69, Shares 1.21B)

Bank of Nova Scotia Beats Profit Expectations Q2

Bank of Nova Scotia Beats Profit Expectations In Q2

Analysts were expecting to see rising loan provisions over the past year drag down the Bank of Nova Scotia’s quarterly earnings, but its net income for the three months to April 30 shows little signs of that draining trend.

As the Financial Post reports, the bank’s high-than-expected second-quarter earnings suggest signs of improved credit quality, which will be music to the ears of investors.

Although Scotiabank’s provisions for credit losses increased 20% compared with the same quarter last year to $448 million, they were down 3% on Q1 and some 21% lower than the fourth quarter of fiscal 2014.

In a note to clients following the results, Darko Mihelic, analyst at RBC Capital Markets, suggested the figures were cause for optimism.

He said: “We did not see any true signs of stress in credit quality. Net impaired loan formations declined both sequentially and compared to the year prior.”

Net income for the country’s third-largest lender by market capitalization stood at $1.8 billion, or $1.42 per share, which is on a par with the figure reported in the same quarter last year.

Meanwhile, its adjusted earnings showed up particularly well, coming in at $1.43 per share, surpassing the average analyst estimate of $1.39 per share.

Scotiabank paid special mention to the $829 million profit derived from its Canadian banking unit, which it said was driven higher year-on-year by a 10 basis point increase in the net interest margin.

The bank will also be pleased with the performance of both its capital markets and international segments, allowing it to announce a new program in which it plans to repurchase up to 24 million, or 2%, of its outstanding shares.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that successful investors focus on the quality of the assets they buy. Speculators focus on guessing the future prices.

Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Scotiabank Scales Back Global Operations With Egypt Sale

The pattern of Canadian banks stripping back their global operations continues, with Scotiabank, formally known as the Bank of Nova Scotia (TSE:BNS, Mkt cap 78.10B, P/E 11.34, Div/yield 0.68/4.21, EPS 5.69, Shares 1.21B) announcing it has sold its loan and deposit portfolio in Egypt to the Arab African International Bank (AAIB).

Stockwatch Scotiabank Scales Back Global Operations Egypt Sale

Stockwatch – Scotiabank Scales Back Global Operations With Egypt Sale

As the Financial Post reports, Scotia has been in Egypt since 1976, with a branch in Cairo, but decelerating domestic growth, coupled with intense global regulation, are said to have played a part in the scaling back of its international business.

Scotia is not the only Canadian bank to re-assess the costs and benefits of operating abroad. In November last year, Royal Bank of Canada said a “strategic review” prompted the decision to exit the bank’s international client wealth-management business in the Caribbean.

The restructuring was part of a plan to pursue “sustainable, controlled growth and profitable scale” in its most profitable markets, officials at RBC, Canada’s largest bank by market capitalization, said at the time.

Marcelo Gomez-Wiuckstern, director of Scotia’s international banking communications, cited similar reasons behind its move away from Egypt, stressing that the decision is “purely strategic” as the bank manoeuvres its resources in the direction of its “focus priorities”.

“Our focus in this transition was to find a partner who shares our values and commitment to providing great service to our customers,” he said.

As part of the agreement, AAIB will become Scotia’s “preferred correspondent bank” in Egypt, providing banking services to customers of Canada’s third-largest bank who do business in the country, explained Gomez-Wiuckstern.

Alongside acquiring Scotia’s portfolio of deposits and loans in Egypt, AAIB procures a trade finance portfolio.

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe successful investors must challenge the market consensus by maintaining an independent point of view.

Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

SmallCapPower Interview – Canadian Bank Stock Insight and Investing Advice from Michael Sprung

SmallCapPower Interview – The ceasing of quantitative easing is really hinting at the fact that the underlying economies are getting strong enough to stand on their own.

Sprung Investment Management CEO Michael Sprung provides his thoughts on Quantitative Easing and the gold price, Canadian bank stocks, and offers up his outlook for U.S. and Canadian equity markets. He also outlines his criteria for choosing stocks and mentions one company he thinks is a “very good buy at today’s levels.”

SmallCapPower.com Interview ceasing quantitative easing underlying economies strong enough stand

SmallCapPower.com Interview – The ceasing of quantitative easing is really hinting at the fact that the underlying economies are getting strong enough to stand on their own.

Mark Thorburn: Sprung Investment Management helps clients moderate swings in market volatility through a value investing approach aimed at preserving wealth and providing a real rate of return after fees and inflation. They are known for employing philosophies that frequently run contrary to current investment trends.

Welcome back Michael. Please remind viewers once again about your firm and your role there.

Michael Sprung: I’d be pleased to. Sprung Investment Management is an investment boutique. We primarily cater to individuals, families, endowments, foundations and so on. It just so happens that the bulk of the money we manage is in family trusts. As such, one of our key objectives is really is the preservation of capital and beyond that some growth beyond our fees and inflation. So it tends to be fairly conservative money. We’re value investors. We invest for the long-term and so we tend to look more at the micro-economic issues that affect individual companies and their valuation parameters than we do spend time on the marco-economic environment.

MT: What affect will the ceasing of quantitative easing have on the gold price?

MS: Well, in the long-term I would suspect that it will be positive. The ceasing of quantitative easing is really hinting at the fact that the underlying economies, particularly in the US are getting strong enough to stand on their own. They don’t need the stimulus that was necessary after the financial crisis. With that should come some inflationary tendency. As the economy grows we will eventually see wage and price inflation pressure come into the picture. As such, gold should react positively in that environment.

MT: So what is your outlook for the Canadian and US equity markets during the next one to two years?

MS: Yes, we have had quite a ride this year. The year started out quite well for both economies. But since then the Canadian market has been hit particularly by the decline in commodity prices, whereas the US market which did take a temporary hit, it has now recovered somewhat. Overall, it really appears that the US is carrying the weight of the world on its shoulders at the moment. It’s the one economy that can see relatively good positive growth in GDP. On the other hand, commodities have been hurt, particularly by the slowdown we see in the emerging economies, especially China, the stagnation that is apparent in Europe, particularly with the slowdown of expectations in Germany and as a result the commodity prices have been hurt quite a bit. We expect that it is going to be a period of sustained volatility until the economies get back into sync. That could take some time, whether it’s six months or a year I don’t know.

You can can view the entire  interview here>>

SmallCapPower.com is a leading resource for small cap investors. The website gives visitors unparalleled engagement and access to small cap companies, research analysts, subject matter experts, investment professionals as well as fellow site visitors.

SmallCapPower.com is the exclusive online destination to access Ubika Research reports, CEO video interviews and daily investment ideas. Through a Postmedia branding association, the website, content and online platform gets coast-to-coast media exposure in nine daily newspapers as well as the Nationalpost.com and Financialpost.com websites.

SmallCap Power brings investors, smallcap companies and financial industry professionals together to interact, discover and communicate through a platform where they are encouraged to ask questions and share ideas. Learn more here>>

Stockwatch – Michael Sprung on BNN Market Call – Market Outlook and Top Picks

Stockwatch – Market Outlook:

Market volatility is likely to continue as investors deal with the multiple geopolitical issues in the global environment as well as economic concerns, particularly in Europe, Japan and China. Canadian markets have been more vulnerable due to exposure to resources. The U.S. economy continues to exhibit signs of progress and relative stability resulting in investors pushing up the U.S. markets and currency. Recent pullbacks have been short lived, but investors should be prepared to take advantage of opportunities as they occur.

Stockwatch Michael Sprung BNN Market Call Market Outlook Top Picks

Stockwatch – Michael Sprung on BNN Market Call – Market Outlook and Top Picks

Stockwatch – Top Picks:

Stockwatch – Bank of Nova Scotia (Scotiabank)

Bank of Nova Scotia (TSE:BNS, Mkt cap 85.66B, P/E 12.02, Div/yield 0.66/3.75, EPS 5.86, Shares 1.22B) or Scotiabank is the most international of the Canadian banks with branches in the Caribbean, Central and South America. The Canadian banks have been impacted by recent market declines. Scotiabank is now selling at levels that long-term investors should find attractive, as the premium valuation has fallen. The dividend yield is now 3.8 percent. Last Purchase on September 19, 2014 at $71.75

Stockwatch – Precision Drilling

Precision Drilling Corporation (TSE:PD, Mkt cap 2.65B, P/E 12.31, Div/yield 0.07/3.09, EPS 0.74, Shares 292.78M) is Canada’s leading provider of drilling and industrial services and one of the larger land service providers in the US with presence in Mexico and the Middle East. The stock has reacted to the recent pull back in the energy sector. Given the strong balance sheet and 3 percent yield, the stock is attractively priced. Last Purchase on October 27, 2014 at $9.09

Stockwatch – New Flyer Industries

New Flyer Industries Inc (TSE:NFI, Mkt cap 723.79M, P/E 21.97, Div/yield 0.0488/4.37, EPS 0.61, Shares 55.50M) manufactures and assembles transit buses in Canada and the US as well as providing aftermarket services. Third quarter results were affected by fewer deliveries as a result of delays in inspections. The company has been a consolidator in North America and is well positioned to participate in fleet renewals. Last Purchase on September 9, 2014 at $13.70

You can see Michael discuss his outlook and top picks on our video page here>>

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains.

Is Your Stock Broker Acting in Your Best Interest? Read more here>>

Exchange Traded Funds Expose Investors to Unexpected Risks. Read more here>>

We believe that successful investors focus on the quality of the assets they buy. Speculators focus on guessing the future prices.

Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.