Two of our Stock Picks were down noticeably today. Canadian Western Bank was down 4.8% and Constellation Software was down 4.4%. On the other hand, Bank of America was up 2.8%.
Canadian Western Bank released earnings this morning and the stock fell 4.8%. At a quick look, the earnings were not bad. Adjusted earnings per share were up 2%. Not great but not awful. The market does not like that the net interest margin is lower. But the lower margin should not be a surprise with interest rates so low. I believe that the shares offer reasonable value at this price and that a Buy rating remains applicable. I don’t think a person would go too far wrong in buying and holding these shares.
Constellation Software released earnings this morning and the stock fell 4.4%. At a quick look, the earnings were quite good. I am comfortable holding this stock.
U.S. banks stocks may do well in the wake of the Fed’s stress tests taht were released today. Apparently further results are due next week and by the end of next week there may be indications of increased dividends at some U.S. banks.
Melcor showed little reaction to its earnings report. It is thinly traded and not followed by many analysts and so that may explain the lack of reaction.