Investing

CM - Sell or Hold?

  • Last Updated:
  • Oct 15th, 2017 12:25 pm
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33 replies
Banned
Nov 23, 2016
28 posts
11 upvotes
Very nice profit cash out and move on to other stocks and buy some AMY for short term or DNYA for longterm. If you want low risk go get some Hydro one while its cheap. Hydro one will increase eventually and they got great dividends too. Almost as cheap as the IPO.
Deal Addict
Nov 9, 2013
1845 posts
629 upvotes
Edmonton, AB
Why sell because the price you paid is different than today's price? What's the value of CM? This is what you should base your decision on.
Member
User avatar
Feb 23, 2004
371 posts
18 upvotes
I sold mine. But i regret it...keep it.
That's around $202/month in dividends.... maybe just take 200 out every month and spend it , buy a nice dinner for the family or something..
Newbie
Sep 18, 2016
64 posts
16 upvotes
keep it and use the div to buy other stuff you want
"Just because it's illogical doesn't mean it can't continue to move up"
Deal Addict
Jun 3, 2009
3656 posts
433 upvotes
Montreal
goldbar wrote:
Dec 5th, 2016 10:01 pm
Very nice profit cash out and move on to other stocks and buy some AMY for short term or DNYA for longterm. If you want low risk go get some Hydro one while its cheap. Hydro one will increase eventually and they got great dividends too. Almost as cheap as the IPO.
I wouldn't sell out CM just to gamble on ANY or DYNA.

Unless you see other bargains, I'd simply let it drip.
Member
Dec 7, 2007
223 posts
77 upvotes
goldbar wrote:
Dec 5th, 2016 10:01 pm
Very nice profit cash out and move on to other stocks and buy some AMY for short term or DNYA for longterm. If you want low risk go get some Hydro one while its cheap. Hydro one will increase eventually and they got great dividends too. Almost as cheap as the IPO.
In the current environment, I don't know that selling a bank (which benefits from a rising interest rate environment) to purchase a utility (which is harmed by a rising interest rate environment) would be the wisest decision an investor can make...

http://www.investopedia.com/ask/answers ... -rates.asp
[OP]
Deal Addict
User avatar
Feb 9, 2012
3030 posts
225 upvotes
Toronto
goldbar wrote:
Dec 5th, 2016 10:01 pm
Very nice profit cash out and move on to other stocks and buy some AMY for short term or DNYA for longterm. If you want low risk go get some Hydro one while its cheap. Hydro one will increase eventually and they got great dividends too. Almost as cheap as the IPO.
I bought 500 Hydro One at IPO.. Don't need anymore.
toolioiep wrote:
Dec 6th, 2016 9:17 am
In the current environment, I don't know that selling a bank (which benefits from a rising interest rate environment) to purchase a utility (which is harmed by a rising interest rate environment) would be the wisest decision an investor can make...

http://www.investopedia.com/ask/answers ... -rates.asp
I think I'll keep them.

The yield based on my cost is over 6%.

However, I will probably stop the automatic DRIP with BMOIL as there is no need to buy at such high prices.
Jr. Member
Jul 29, 2010
144 posts
25 upvotes
ottawa
it becomes challenging to answer a question like this due to not knowing the intention and the type of trading or type of portfolio so here's two polar answers:

for a long term investor: never sell this. always hold it, DRIP it until you retire and when you need income, stop the drip and live off the dividends.

for the short term swing trader or position trader: sell it. technically it's had a big run over the last 30 days at an unsustainable level. the chance of risk of dropping by $5 is greater than chance of the reward of getting much higher. the whole TSX has been moving sideways for months. this could be a levelling off before going to a higher plateau (i doubt it) or a peak which is much more likely. i don't care either way, if it starts going back up i'll buy more, if it goes down i'll wait and buy more.
Deal Addict
User avatar
Mar 16, 2010
1452 posts
603 upvotes
Hamilton
I don't sell stocks unless the fundamentals are deteriorating or it's trading way above its intrinsic price, which is not the case with CM on either point. I would look at the original reason for owning the CM in the first place and if it still fits within the context of your current portfolio. If that reason hasn't changed, or you never had one in the first place, why sell it?

CM also trades at the lowest P/E of the big five that I see (CM - 10.60, TD - 14.41, RY - 12.76, BMO - 13.66, BNS - 13.15). It's trading close to its historic P/E, so at the very least a HOLD.

I sense a split coming if it can hold above 100, which theoretically could drive up the price some more because it's cheaper. I have no real basis for this last thought other than banks usually do it when they get over 100 and it will appear cheaper lol.
Deal Addict
User avatar
May 11, 2014
1596 posts
631 upvotes
Iqaluit, NT
Do you want to invest into something where you may have a turnaround? If I were you, I would keep CM, but if you want a riskier bet, Canadian Western Bank might be a decent bank to invest. An Alberta turnaround over the long term may make their share price appreciate further.
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Deal Expert
User avatar
Sep 19, 2004
20111 posts
3035 upvotes
Waterloo
I think many people have the same dilemma with Cdn banks now - TD, BMO, BNS, CM, NA, all new 52w highs.... except RY which tanked 3% post-ER (I bought some at $87) as others were pricey

May sell some of my BMO to take profits and maybe buy financials ETF like XFN or ZWB/ZEB
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Newbie
Dec 5, 2016
1 posts
Hold.
Although I would say that Canadian banks have put more emphasis on eps growth vs their long-term metric of return on equity in the mid teens.

Examples: RY's recent purchase of City National and CM's pending takeover of Private Bancorp both have return on invested capital rates of sub 5%.

CM's target company is trading above the takeover price, implying shareholders will vote down the merger or force CM to sweeten their price, lowering return further.

All Cdn banks have made multiple new highs in stock prices.
Increasing US treasury rates will improve their net interest margins. The Canadian banks have cut cut cut costs to profitability recently, now there is a bit of a tailwind in their core businesses. More upside to come, keep an eye on your technical levels if they move too far too fast.

Agree with comment about dripping divs. Most banks are chickenShut about clients holding single positions > 10% of aggregate portfolio now.
[OP]
Deal Addict
User avatar
Feb 9, 2012
3030 posts
225 upvotes
Toronto
Thank you all. Really appreciate the help.

I will hold these as I don't need the money and I've held them for 8 years now. I'm a long term investor.

Question on DRIP... Should I stop it for now since the price is at it highs and start again if they fall? Or just keep the drip on?
Deal Addict
User avatar
Dec 28, 2007
3598 posts
642 upvotes
Alberta
cessnabmw wrote:
Dec 5th, 2016 9:07 pm
I have about 650 shares of CM, average cost of about $78 per share.

It hit $109 today.

Would you sell or hold? I don't need the money and the dividends are great.

Thoughts?
I have 1200 shares bought at $55.29. I'm holding mine.

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