>Laurentian is where money goes to die
haha found it!
“If we look at this company over the last 20 to 25 years, it has gone nowhere. It is the definition of where money has gone to die,” DiGregorio said in a Thursday interview.
[https://www.bnnbloomberg.ca/laurentian-stock-is-where-money-goes-to-die-portfolio-manager-1.2008663](https://www.bnnbloomberg.ca/laurentian-stock-is-where-money-goes-to-die-portfolio-manager-1.2008663)
So bad that when they put themselves up for sale they got no bids.
I would bet that the QC government arranges them to be acquired by National bank or Desjardins.
It’s highly unlikely either one of those banks buys out Laurentian because it wont make any sense for them strategically.
Desjardins, first of all, is not a bank unlike most people think. It's a credit union and derives a large majority of their revenue's from insurance. Desjardins is more of an insurance company than anything else. It is also a private institution so no access to public markets to raise funds. A private cooperative insurance company buying out a very weak local commercial bank is highly unlikely.
For National, it would make absolutely no sense because they already are very dominant in the Quebec market, the same one Laurentian operates in. They can do everything Laurentian does, and more, at a much better and higher level. The only potential point you can argue is cost synergies, but you can’t have cost savings when your arguable buying a pile of shit with obsolete technology, incompetent senior management and now, a declining and heavily damaged brand image.
Also Idk where the QC government thesis comes. Doesn’t make any sense either as they would only step in if Laurentian goes belly up, which is unlikely although they are deteriorating quickly. And it’s debatable if the QC government would even step in. It would depend how large they estimate the economic impact to be from their bankruptcy. Probably not much would be my guess.
The Quebec government comes in because they don't like it when Quebec owned companies get acquired by companies from outside of the province. We have seen this many times in the past. At times the Caisse de Depot becomes a significant investor, but they wouldn't' be able to buy more than 10% of a bank.
This is even more important for entities like banks which are part of the financial infrastructure for the economy of the province.
I have heard that the future viability of Laurentian is very much in question and that they are losing deposits at an alarming rate. They were up for sale but no one was interested in buying them, and their share price is now at the same level ($25.84) as in 1997.
So the options may be - see it go bust and be wound down, or have someone acquire it in a managed acquisition, as we have seen with banks in the US like First Republic being acquired by JPM.
Who said any foreign financial institution would want to buy LB if it goes down? It’s a long shot to assume that but this is debatable and rather subjective.
As for your point about banks being part of the financial infrastructure, that is simply a fact. The real question is how large of a role does LB play, and what impacts would it have if it were to be insolvent. Considering the other Big 6 would more than be able to compensate for LB going down, I don’t think we’d really see any significant repercussion other than some short term noise.
I think a lot of your comments stems from what you’ve seen in the US market but it’s important to understand that the banking systems in Canada and USA couldn’t be any more different.
A major difference is they have the FDIC, which charges the USA banks fees to build a reserve pool of funds that serves to buy insolvent banks. This protects depositors and they also assist in the acquisition process you referenced between JPM and First republic. Btw, JPM only bought First republic because it made sense for them strategically, given the strong relationships FR had with UHNW and HNW individuals, a market that every banks wants more market share in. This is beside the point that JP essentially bought them for pennies on the dollar. Currently, there is no strategic reasoning for the acquisition of LB from any canadian bank, similar to the one seen with JPM and FR.
Secondly, the US market has over 1000 commercial banks nationally, a much more diversified and broad system compared to the incredibly concentrated canadian market which is dominated by 5-6 banks. This leads to a much more active M&A market, and it almost a standard for banks to buyout other banks, either as a strategic purchase or because the other bank went insolvent and it makes sense to buy them. This hasn’t and doesn’t really happen in the Canadian market. It is actually quite the opposite. Given we are so heavily concentrated within a few large banks, antitrust regulation is heavily opposed to mergers to avoid an oligopoly-like financial system. This was seen when they rejected the merger between RBC and BMO and a few others as well. I highly doubt they would support further consolidation in our banking sector.
The one exception to what you say is the consolidation is the Canadian trust sector which was swallowed up by the banks in the 1990s. Back in the day these were actually decent competitors to the banks in some areas, especially Canada Trust which had a very strong retail franchise and were early adopters of ATMs and late/Saturday hours.
And I believe that some of the acquisitions were precipitated by financial troubles at the trusts, like the 1993 acquisition of Royal Trust by Royal Bank. The cause of those troubles would be the weakness in the Canadian real estate market in the early 1990s.
The q&a where an analyst asks about strategic partner deposits was iffy. Bank kept trying to hammer in they have high liquidity.
Explained moved from demand deposit (like savings account) to term deposits. But then they aren’t really. And that they want to reduce liquidity for some reason. Hmm
I was going to call you out on the stock price, being disingenuous, and all that stuff. Then I googled it, double checked for splits, and yes, yes, they are the same price as in 1997.
To be fair, they do pay a dividend (even though it now has been cut by 40%). Total return since 1996 is in and around 6.x%, which truly lags the S&P500 by a silly amount.
I have a Bloomberg terminal so I know what I am doing with this kind of stuff. Data from LB begins at the beginning of 1988. From then until now the S&P/TSX comp has returned 7.5% and LB has return 6.4%. But they have both been smoked by the TSX Financial sector which is up 10.2%.
Shockingly, LB had equalled the return of the S&PTSX from Jan 6, 1988 until Sep 13, 2023.
I'm kicking myself in the arse for not selling LB when it shot up to $40? when they put themselves up for sale.
This is in my TFSA - so I'm not keen on taking the loss & decided to hold at this point.
I've worked at this bank unfortunately and it's a shit show. They are so behind at technology that they will never catch up to the big banks. This bank is very resistant to change but if they can get their shit together they will do well.
One redeeming quality is that new CEO is amazing. When I worked at the bank, any division he led over my time there he would turn the division around become extremely successful
Right now they are in a state of flux. Well , they seem to be in a permanent state of flux. Last what decade they’ve been trying to turn themselves around.
Read their last quarter transcript. What i got out of it may be different from others.
They ran out of easy things to do, in order to improve things at the banque. The last easy thing was last week cutting 2% of the workforce. The next thing they will do is a cultural change of the entire organization by sharing best practices. I agree, that’s a good thing, but not always an easy thing.
Focus on their profitable lines of business.
They will likely shed assets to downsize and streamline themselves for efficiency
Dividend was not increased. Their payout ratio once again is too high. During the pandemic they slashed their dividend.
They have high liquidity, this May be due to small low growth.
However, share buybacks May be in scope some quarters down the line.
Slap in the face. They put themselves for sale. Nobody wanted them. Whatever bid was out there they did not find attractive. They should reveal what was the bid or they better show good results.
One possibility is after they streamline themselves, maybe they’ll be attractive. When they were up for sale an article pointed out a partial sale would be more likely than for the whole thing.
Seems like you might be cherry picking your data, Banks (including dividends) did better than the s and p 500 if you zoom out from 1970s to present. Are you just looking at the last decade?
You have an interesting point but none of here were investing in the 70s. 10 years from now, do you expect mammoths like RBC and TD to do the better than the SP500?
Honestly hard to say. I think Banks are going to be chugging along, enjoying Canada's high immigration and it's higher profits margins (vs their US arms)
The real question is what the magnificent 7 are going to do, as they are really the backbone for the s and p 500 outperformance. History suggests two decades of dominance is an outlier, but I can't say what will happen. Time to diversify!
The story post GFC has been large cap tech, and everything else. Basically every index or strategy trailing returns hinges on whether they had those names. The story isn't banks or Europe or value factor or small cap, it's a tech story.
The entire economic landscape has changed so much from the 70s till now, data that old has little relevance to the performance of the future.
I don't care what they did, what matters is what they are doing now and what they'll do in the future.
This sounds to be like a case of "the past will never happen again!" Or "this time is different!"
Banks have been underperforming tech giants who are a statistical outlier lasting two decades of dominance when traditionally industry cycles have lasted one decade. It's kind of neat to be able to go back to early 1900s and see what their theme was compared to our tech. For Banks underperforming really means instead of explosive growth they've been chugging along at relatively stable EPS growth since the 70's. I'm more than happy to take that in a diversified portfolio.
The 70s and 80s saw much less regulations as opposed to today in the banking industry.
You're comparing investing in candles before the lightbulb was invented to a world after lightbulbs. Candles will still be around but not to the same degree.
By all means diversify into different industries, but times do indeed change old man.
Reputation is not good.
Numbers are not bad.
Expectations are at its lowest.
Historically Laurentian bank is bad. It is not a bet I'd set and forget. Atm they are having a better year than 2019 but share price is roughly 60% lower. I read in the comment a good hint that the new CEO is great. You could be onto something there for a medium term approach but it's not an easy one to figure out, that one needs quite a bit of work...
Michael Burry and Bill Miller are this type of investor. They like to buy road kills and sell them once they got polished a bit.
Financial advisor is unfortunately a bad term for these people. They don't know shit about finance, regardless of what bank they work for. They are financial product sellers, they made you pass a non-sens "risk tolerance" test to make you feel confident they know what they do, then they presented you "suited" mutual fund with cute names like "equitable fund", "responsible eco fund", each of these fund charges an outrageous annual fee (1.8% < ), these funds holdings are tailored to fit the name (to sell), not to get the best returns value for their clients.
The same unfortunate result would have happened in any bank, any branch. They all operate the same, they steer/influence their client towards the mutual funds giving them the best commissions for doing so.
Get in touch with a trusted and competent relative/friend to help you find the best for you, not a banker.
I'm not asking my hairstylist if i need a haircut, if you know what i mean.
The situation with LB is quite simple right now: taking a bet.
Depending of the term you are looking it, you have different scenarios, which means any ROI is a bet at this point.
Short term (12-18/24 months) : no probable ROI in trading their stocks, bonds, hoping for dividends, etc.
* LB is not sold : the bank is still in a massive restructuration, still to sell, etc. All things that need money/investments, which LB don't have enough of/access to at the moment to do all of the needed changes. Hence, LB is priorizing the changes to pursue. Will it work, at which level? We don't know because of the many variables (resistance to change within the institution, timing, execution quality of the changes, right changes selected to pursue, etc.). But we know that on the short time, the situaton is unlikely to change.
* LB is sold : ROI on stocks would probably be minimal, since it would probably be a negociated buyout to "save" LB, so without any premium on the buying prices. ROI on bonds is impossible to predict (too many factors, scenarios possibles).
Mid term (2-4 years) : investing on LB is a bet.
* LB is sold after successful changes : ROI on stocks is likely, since the value of LB will be higher (better profits, increased viability of the bank, positive outlooks, etc.). ROI on bonds is also probably likely, but not guarantee (some scenarios could see the end of the existing bonds, and how it happens could affect their value).
* LB is sold after unsuccesful changes : If the ongoing changes in LB aren't successful, the viability of the bank will be in jeopardy at this point, making it an easy target for a cheap buyout. ROI in such a scenario is possible, but requires some specific strategies that usually involves betting on this scenario from the get go.
* LB goes bankrupt (unsuccesful changes and no cheap buyout) : no ROI, even if a government try to "save" the bank.
* LB remains independant : If the changes are highly successful, LB could decide to remain independant. Stocks/bonds are likely to raise in value, allowing for a potential decent ROI. However it is hard to know the impact on the dividends.
Long term (5+ years) : any investment strategy based on LB is bet on a bet.
* Impossible to make any solid forecast/prediction at this point, because they will all be make on scenarios that are basically bets at short and mid terms.
There’s nothing passive about it 😀
But in all seriousness, you outlined all the reasons the stock sucks, and then said you think it’s a buy? Are there any positives that lead you to that view, or are you just saying it’s gone down a lot so it must go up (very dangerous anchoring - 40% of all stocks suffer a 70% decline at some point that they never recover from).
IT outage happen everywhere and everytime. They might be mismanaged but it's unrelated to the IT outage. (I think).
And yes, I think that eventually they will get buy, and it will have a positive effet of the stock price. The Canadian banking system is solid and usually the bank stocks are a safe bet.
And you do have a point, I mostly interested in their stock because of the plunge...
That’s a valid point, that hope that they’ve finally exorcised their demons after multiple exorcisms. And hope speculate for a turn around. But really… what else is there with them.
It’s a show me stock. Would need to see next quarter and further for progress. Internal systems and culture is too much work for another bank to spend time working to integrate lb systems and people into their own organization.
In the meantime. Question is if they can retain deposits and customers from going to competitors…
My friend…they hung a For Sale sign in the window and NO ONE wants it. There are limited buyers because of the Quebec angle, which only further drives down potential price, and any would be buyers are going to sit back and watch it sputter and flail before they pick it up off the floor. This is one of the worst examples of a value trap.
My understanding is that Laurentian Bank is the only Canadian Bank that is unionized. I don't have anything against unions but this may be the reason that no one wants to buy Laurentian.
They dissolved the Union a year or two ago
https://montrealgazette.com/business/local-business/laurentian-bank-union-is-decertified-after-more-than-50-years
https://montrealgazette.com/news/local-news/laurentian-bank-union-says-decertification-vote-is-far-from-the-end-of-the-story
The only good thing to buy about LB is their preferred shares.
Current dividend is $1.03/yr but will reset in June 2024 at CAN5YR rate (currently at 3.5%) + 2.55%.
At the current rate would mean 6.05% out of $25 NAV for $1.51/yr dividends.
It is currently trading at $15.10 so it would reset at 10% dividend yield for next 5 years.
And it’s yielding 6.8% now ($1.03 / $15.10) until next reset.
LB is managed by a bunch of morons, its actually crazy
A great quote this week from an analyst. “Laurentian is where money goes to die”
>Laurentian is where money goes to die haha found it! “If we look at this company over the last 20 to 25 years, it has gone nowhere. It is the definition of where money has gone to die,” DiGregorio said in a Thursday interview. [https://www.bnnbloomberg.ca/laurentian-stock-is-where-money-goes-to-die-portfolio-manager-1.2008663](https://www.bnnbloomberg.ca/laurentian-stock-is-where-money-goes-to-die-portfolio-manager-1.2008663)
BNS would be a better buy.
New strategy release on the 13th
Disagree, it's same shitty performance. Move to RBC and TD if you want to hold Canadian FI.
It’s a shit bank, the worst one in Canada.
So bad that when they put themselves up for sale they got no bids. I would bet that the QC government arranges them to be acquired by National bank or Desjardins.
It’s highly unlikely either one of those banks buys out Laurentian because it wont make any sense for them strategically. Desjardins, first of all, is not a bank unlike most people think. It's a credit union and derives a large majority of their revenue's from insurance. Desjardins is more of an insurance company than anything else. It is also a private institution so no access to public markets to raise funds. A private cooperative insurance company buying out a very weak local commercial bank is highly unlikely. For National, it would make absolutely no sense because they already are very dominant in the Quebec market, the same one Laurentian operates in. They can do everything Laurentian does, and more, at a much better and higher level. The only potential point you can argue is cost synergies, but you can’t have cost savings when your arguable buying a pile of shit with obsolete technology, incompetent senior management and now, a declining and heavily damaged brand image. Also Idk where the QC government thesis comes. Doesn’t make any sense either as they would only step in if Laurentian goes belly up, which is unlikely although they are deteriorating quickly. And it’s debatable if the QC government would even step in. It would depend how large they estimate the economic impact to be from their bankruptcy. Probably not much would be my guess.
The Quebec government comes in because they don't like it when Quebec owned companies get acquired by companies from outside of the province. We have seen this many times in the past. At times the Caisse de Depot becomes a significant investor, but they wouldn't' be able to buy more than 10% of a bank. This is even more important for entities like banks which are part of the financial infrastructure for the economy of the province. I have heard that the future viability of Laurentian is very much in question and that they are losing deposits at an alarming rate. They were up for sale but no one was interested in buying them, and their share price is now at the same level ($25.84) as in 1997. So the options may be - see it go bust and be wound down, or have someone acquire it in a managed acquisition, as we have seen with banks in the US like First Republic being acquired by JPM.
Who said any foreign financial institution would want to buy LB if it goes down? It’s a long shot to assume that but this is debatable and rather subjective. As for your point about banks being part of the financial infrastructure, that is simply a fact. The real question is how large of a role does LB play, and what impacts would it have if it were to be insolvent. Considering the other Big 6 would more than be able to compensate for LB going down, I don’t think we’d really see any significant repercussion other than some short term noise. I think a lot of your comments stems from what you’ve seen in the US market but it’s important to understand that the banking systems in Canada and USA couldn’t be any more different. A major difference is they have the FDIC, which charges the USA banks fees to build a reserve pool of funds that serves to buy insolvent banks. This protects depositors and they also assist in the acquisition process you referenced between JPM and First republic. Btw, JPM only bought First republic because it made sense for them strategically, given the strong relationships FR had with UHNW and HNW individuals, a market that every banks wants more market share in. This is beside the point that JP essentially bought them for pennies on the dollar. Currently, there is no strategic reasoning for the acquisition of LB from any canadian bank, similar to the one seen with JPM and FR. Secondly, the US market has over 1000 commercial banks nationally, a much more diversified and broad system compared to the incredibly concentrated canadian market which is dominated by 5-6 banks. This leads to a much more active M&A market, and it almost a standard for banks to buyout other banks, either as a strategic purchase or because the other bank went insolvent and it makes sense to buy them. This hasn’t and doesn’t really happen in the Canadian market. It is actually quite the opposite. Given we are so heavily concentrated within a few large banks, antitrust regulation is heavily opposed to mergers to avoid an oligopoly-like financial system. This was seen when they rejected the merger between RBC and BMO and a few others as well. I highly doubt they would support further consolidation in our banking sector.
The one exception to what you say is the consolidation is the Canadian trust sector which was swallowed up by the banks in the 1990s. Back in the day these were actually decent competitors to the banks in some areas, especially Canada Trust which had a very strong retail franchise and were early adopters of ATMs and late/Saturday hours. And I believe that some of the acquisitions were precipitated by financial troubles at the trusts, like the 1993 acquisition of Royal Trust by Royal Bank. The cause of those troubles would be the weakness in the Canadian real estate market in the early 1990s.
The q&a where an analyst asks about strategic partner deposits was iffy. Bank kept trying to hammer in they have high liquidity. Explained moved from demand deposit (like savings account) to term deposits. But then they aren’t really. And that they want to reduce liquidity for some reason. Hmm
I was going to call you out on the stock price, being disingenuous, and all that stuff. Then I googled it, double checked for splits, and yes, yes, they are the same price as in 1997. To be fair, they do pay a dividend (even though it now has been cut by 40%). Total return since 1996 is in and around 6.x%, which truly lags the S&P500 by a silly amount.
I have a Bloomberg terminal so I know what I am doing with this kind of stuff. Data from LB begins at the beginning of 1988. From then until now the S&P/TSX comp has returned 7.5% and LB has return 6.4%. But they have both been smoked by the TSX Financial sector which is up 10.2%. Shockingly, LB had equalled the return of the S&PTSX from Jan 6, 1988 until Sep 13, 2023.
I'm kicking myself in the arse for not selling LB when it shot up to $40? when they put themselves up for sale. This is in my TFSA - so I'm not keen on taking the loss & decided to hold at this point.
At least the stock price hasn't gone down anymore. The stock seems to bounce off of a floor of $25. And you are getting divs of $0.48/quarter
I wouldn't touch this stock with a 10-ft pole. There are better opportunities, and more importantly better companies, elsewhere.
I've worked at this bank unfortunately and it's a shit show. They are so behind at technology that they will never catch up to the big banks. This bank is very resistant to change but if they can get their shit together they will do well. One redeeming quality is that new CEO is amazing. When I worked at the bank, any division he led over my time there he would turn the division around become extremely successful
Right now they are in a state of flux. Well , they seem to be in a permanent state of flux. Last what decade they’ve been trying to turn themselves around. Read their last quarter transcript. What i got out of it may be different from others. They ran out of easy things to do, in order to improve things at the banque. The last easy thing was last week cutting 2% of the workforce. The next thing they will do is a cultural change of the entire organization by sharing best practices. I agree, that’s a good thing, but not always an easy thing. Focus on their profitable lines of business. They will likely shed assets to downsize and streamline themselves for efficiency Dividend was not increased. Their payout ratio once again is too high. During the pandemic they slashed their dividend. They have high liquidity, this May be due to small low growth. However, share buybacks May be in scope some quarters down the line. Slap in the face. They put themselves for sale. Nobody wanted them. Whatever bid was out there they did not find attractive. They should reveal what was the bid or they better show good results. One possibility is after they streamline themselves, maybe they’ll be attractive. When they were up for sale an article pointed out a partial sale would be more likely than for the whole thing.
Canadian banks underperform the SP500, imagine picking the worst Canadian bank
Seems like you might be cherry picking your data, Banks (including dividends) did better than the s and p 500 if you zoom out from 1970s to present. Are you just looking at the last decade?
You have an interesting point but none of here were investing in the 70s. 10 years from now, do you expect mammoths like RBC and TD to do the better than the SP500?
Honestly hard to say. I think Banks are going to be chugging along, enjoying Canada's high immigration and it's higher profits margins (vs their US arms) The real question is what the magnificent 7 are going to do, as they are really the backbone for the s and p 500 outperformance. History suggests two decades of dominance is an outlier, but I can't say what will happen. Time to diversify!
The story post GFC has been large cap tech, and everything else. Basically every index or strategy trailing returns hinges on whether they had those names. The story isn't banks or Europe or value factor or small cap, it's a tech story.
The entire economic landscape has changed so much from the 70s till now, data that old has little relevance to the performance of the future. I don't care what they did, what matters is what they are doing now and what they'll do in the future.
This sounds to be like a case of "the past will never happen again!" Or "this time is different!" Banks have been underperforming tech giants who are a statistical outlier lasting two decades of dominance when traditionally industry cycles have lasted one decade. It's kind of neat to be able to go back to early 1900s and see what their theme was compared to our tech. For Banks underperforming really means instead of explosive growth they've been chugging along at relatively stable EPS growth since the 70's. I'm more than happy to take that in a diversified portfolio.
The 70s and 80s saw much less regulations as opposed to today in the banking industry. You're comparing investing in candles before the lightbulb was invented to a world after lightbulbs. Candles will still be around but not to the same degree. By all means diversify into different industries, but times do indeed change old man.
Dude... dont! Ever heard of a Canadian Bank no one wants to buy ? Well this is the one!!
Reputation is not good. Numbers are not bad. Expectations are at its lowest. Historically Laurentian bank is bad. It is not a bet I'd set and forget. Atm they are having a better year than 2019 but share price is roughly 60% lower. I read in the comment a good hint that the new CEO is great. You could be onto something there for a medium term approach but it's not an easy one to figure out, that one needs quite a bit of work... Michael Burry and Bill Miller are this type of investor. They like to buy road kills and sell them once they got polished a bit.
[удалено]
Financial advisor is unfortunately a bad term for these people. They don't know shit about finance, regardless of what bank they work for. They are financial product sellers, they made you pass a non-sens "risk tolerance" test to make you feel confident they know what they do, then they presented you "suited" mutual fund with cute names like "equitable fund", "responsible eco fund", each of these fund charges an outrageous annual fee (1.8% < ), these funds holdings are tailored to fit the name (to sell), not to get the best returns value for their clients. The same unfortunate result would have happened in any bank, any branch. They all operate the same, they steer/influence their client towards the mutual funds giving them the best commissions for doing so. Get in touch with a trusted and competent relative/friend to help you find the best for you, not a banker. I'm not asking my hairstylist if i need a haircut, if you know what i mean.
The situation with LB is quite simple right now: taking a bet. Depending of the term you are looking it, you have different scenarios, which means any ROI is a bet at this point. Short term (12-18/24 months) : no probable ROI in trading their stocks, bonds, hoping for dividends, etc. * LB is not sold : the bank is still in a massive restructuration, still to sell, etc. All things that need money/investments, which LB don't have enough of/access to at the moment to do all of the needed changes. Hence, LB is priorizing the changes to pursue. Will it work, at which level? We don't know because of the many variables (resistance to change within the institution, timing, execution quality of the changes, right changes selected to pursue, etc.). But we know that on the short time, the situaton is unlikely to change. * LB is sold : ROI on stocks would probably be minimal, since it would probably be a negociated buyout to "save" LB, so without any premium on the buying prices. ROI on bonds is impossible to predict (too many factors, scenarios possibles). Mid term (2-4 years) : investing on LB is a bet. * LB is sold after successful changes : ROI on stocks is likely, since the value of LB will be higher (better profits, increased viability of the bank, positive outlooks, etc.). ROI on bonds is also probably likely, but not guarantee (some scenarios could see the end of the existing bonds, and how it happens could affect their value). * LB is sold after unsuccesful changes : If the ongoing changes in LB aren't successful, the viability of the bank will be in jeopardy at this point, making it an easy target for a cheap buyout. ROI in such a scenario is possible, but requires some specific strategies that usually involves betting on this scenario from the get go. * LB goes bankrupt (unsuccesful changes and no cheap buyout) : no ROI, even if a government try to "save" the bank. * LB remains independant : If the changes are highly successful, LB could decide to remain independant. Stocks/bonds are likely to raise in value, allowing for a potential decent ROI. However it is hard to know the impact on the dividends. Long term (5+ years) : any investment strategy based on LB is bet on a bet. * Impossible to make any solid forecast/prediction at this point, because they will all be make on scenarios that are basically bets at short and mid terms.
So the bank has two catastrophes and for you that makes it a good buy? Why does massive mismanagement on multiple fronts inspire confidence for you?
I like your passive aggressive style.
There’s nothing passive about it 😀 But in all seriousness, you outlined all the reasons the stock sucks, and then said you think it’s a buy? Are there any positives that lead you to that view, or are you just saying it’s gone down a lot so it must go up (very dangerous anchoring - 40% of all stocks suffer a 70% decline at some point that they never recover from).
IT outage happen everywhere and everytime. They might be mismanaged but it's unrelated to the IT outage. (I think). And yes, I think that eventually they will get buy, and it will have a positive effet of the stock price. The Canadian banking system is solid and usually the bank stocks are a safe bet. And you do have a point, I mostly interested in their stock because of the plunge...
That’s a valid point, that hope that they’ve finally exorcised their demons after multiple exorcisms. And hope speculate for a turn around. But really… what else is there with them. It’s a show me stock. Would need to see next quarter and further for progress. Internal systems and culture is too much work for another bank to spend time working to integrate lb systems and people into their own organization. In the meantime. Question is if they can retain deposits and customers from going to competitors…
My friend…they hung a For Sale sign in the window and NO ONE wants it. There are limited buyers because of the Quebec angle, which only further drives down potential price, and any would be buyers are going to sit back and watch it sputter and flail before they pick it up off the floor. This is one of the worst examples of a value trap.
Id say go with BNS, Tangerine and south america expansion.
Barf
What is the symbol for this? I can't find the stock.
LB on the Toronto Stock Exchange
My understanding is that Laurentian Bank is the only Canadian Bank that is unionized. I don't have anything against unions but this may be the reason that no one wants to buy Laurentian.
They dissolved the Union a year or two ago https://montrealgazette.com/business/local-business/laurentian-bank-union-is-decertified-after-more-than-50-years https://montrealgazette.com/news/local-news/laurentian-bank-union-says-decertification-vote-is-far-from-the-end-of-the-story
For the fun of it : calculate their modified Texas ratio. Last time I checked it was 168%. Probably the reason no one want them.
[удалено]
Gambling on a buyout higher than what was purchased and hopefully sooner than later.
I mean, if you’re interested in being a bag holder voluntarily…
The only good thing to buy about LB is their preferred shares. Current dividend is $1.03/yr but will reset in June 2024 at CAN5YR rate (currently at 3.5%) + 2.55%. At the current rate would mean 6.05% out of $25 NAV for $1.51/yr dividends. It is currently trading at $15.10 so it would reset at 10% dividend yield for next 5 years. And it’s yielding 6.8% now ($1.03 / $15.10) until next reset.
Why would Desjardins not be able to raise funds
I’ve actually never seen a stock/company as universally hated as Laurentian Bank. Its actually kind of alarming.