I am wondering what your thoughts are on CIX. Do you think the shares can get to $30.
Is BNS a buy at current levels?
Is it likely for interest rates to fall? If so, what would be some stock ideas to take advantage of a lower interest rate?
Thanks!
We think BNS can be bought slowly. It remains one of the weaker banks in terms of performance, but it has a new CEO who has already implemented changes. The Q3 was not great but interestingly it has already recovered from the decline when the quarter was announced. The dividend yield is near historical highs and is likely safe. We would not expect CIX to double. While it is a very cheap stock with a good dividend, earnings growth is simply not enough for us to predict such a big move. It could do better in a lower interest rate environment, and a big market rally would be a big catalyst for growth. But we would see it more as an income stock than for growth. The market is now 'assuming' rates are going to decline next year. This is good, unless they don't. Sentiment and expectations have shifted dramatically in the past month. We think the two stocks mentioned above would benefit, as well as SLF, GSY, QSR, EIF and many more.