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Toronto-Dominion Bank (The) (TD $129.47)
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Bank of Nova Scotia (The) (BNS $96.23)
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goeasy Ltd. (GSY $115.55)
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Propel Holdings Inc. (PRL $20.58)
Q: I hold all four of these financials.
The Bank stocks are performing well while GSY and PRL are not,
All are in the lending business. I would appreciate your explanation
of this difference other than the type of borrower they serve given economic concerns.
Thank you
John
The Bank stocks are performing well while GSY and PRL are not,
All are in the lending business. I would appreciate your explanation
of this difference other than the type of borrower they serve given economic concerns.
Thank you
John
5i Research Answer:
Part of the issue is size. GSY/PRL are of course much smaller than any of the banks, and investors at times get concerned on small caps in general. Smaller companies of course have less flexibility and diversity and could be more vulnerable in a recession. Then, we have concerns on rate caps (10% credit card limits in the US, there are already rate caps in Canada for lending). While this is not necessarily bad for the smaller companies (it could actually drive more business to alternative lenders), it still worries investors. Then, with both but moreso with GSY, investors have been concerned with slower loan growth and loan losses. There has been a short report (September) on GSY, which further scared investors.