August 29, 2019

Markets were strong on Thursday with the S&P 500 up 1.3% and Toronto up 0.7%.

Linamar was up 2.35%. And FedEx was up 2.7%. Presumably both related to more optimism or less pessimism about trade wars.

Canadian Western Bank reported Q3 earnings which really could not have been expected to be much better. Growth around 10%. Credit losses down marginally. The only negative was a slightly lower net interest margin due to lower rates. Also admin costs were up but that was expected. The stock rose only 0.35% despite the markets having a strong day. Basically, it seems that investors are cautious on bank stocks and so CWB remains cheap and I believe attractive.

The bank did say that 2019 earnings growth is expected to be slightly below their medium term target. That could be mostly due to Q2 which had low growth. Overall the tone from management remains optimistic.

Also, they increased the dividend by 4% and that is the second increase this year.