Investing

is LB a good time to buy

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  • Sep 23rd, 2020 9:21 am
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[OP]
Jr. Member
Jul 16, 2020
130 posts
23 upvotes

is LB a good time to buy

are they going under? their stk price has dropped 50% since march
15 replies
Deal Addict
Sep 19, 2009
2036 posts
847 upvotes
Toronto
All financials are getting crushed in current market and have short term negative outlook. They also pay generous dividends and sooner or later, will start going up.

Regarding your question if LB is going under, I believe that none of us will live long enough to see a Canadian bank going bankrupt :)
Deal Expert
User avatar
Feb 11, 2009
17427 posts
4259 upvotes
Toronto
Still has room to fall compared to the other banks, dividend yields not he low end, PE Ratio is still high
Real Estate Agent, MAcc, CPA, CA
Member
Jul 30, 2012
424 posts
411 upvotes
Frankly, there would never be a good time to "buy LB" as a long-term hold Winking Face (if you want to focus on Que_buy NA). Possible short-term trading purposes only. Remember. LB now has a blemish of recent dividend cutting unlike it's peers.

Canadian Banks Performance Link

If you are bottom fishing for price and yield right now, look at BNS.

As for long-term track records (15 Years+), NA, RY, TD, BNS are close in annualized share price performance. If forced to pick today, I would go with BNS as is much more diversified than LB. I personally prefer RY on pullbacks for a long-term hold. Too expensive at current levels, however.
[OP]
Jr. Member
Jul 16, 2020
130 posts
23 upvotes
RY is trading close to 100, will they even split in the future ? unlikely.....
[OP]
Jr. Member
Jul 16, 2020
130 posts
23 upvotes
BNS credit losses are starting to climb, NA is close to what it is back in March .
[OP]
Jr. Member
Jul 16, 2020
130 posts
23 upvotes
would that be a good buy (LB) for RRSP? they could go back up to $50 in the long term , where as RY, NA are back to the price where they were ...
Deal Addict
Oct 21, 2014
1456 posts
1799 upvotes
Burlington, ON
Onlyuo wrote: would that be a good buy (LB) for RRSP? they could go back up to $50 in the long term , where as RY, NA are back to the price where they were ...
Can I ask why you'd want to own LB rather than something larger like RY or TD? TD is a very compelling value right now, yielding over 5%.
[OP]
Jr. Member
Jul 16, 2020
130 posts
23 upvotes
which one will give the most return ?

RY now is around approx $96 before march price is at $100
TD now is around approx $62 $$76
LB now is around approx $$28, $46

if banks are continued to better, will RY goes up to 2 times, or even split, TD may split , LB.. do have rooms to expand or contract..
Deal Addict
Dec 4, 2011
1233 posts
593 upvotes
Montreal
If you are going to own a QC bank forget LB and get NA. You don't want the hassle of the only bank with unionized staff (LB) trying to restructure and closing branches. Why deal with that mess? If you did not know this fact then what is your investment decision process?

If we could tell you for certain which bank will provide the best return a) we wouldn't share and b) we would be gazillionaires.

Finally, in my personal opinion, you buy a bank for the same reason you would have REITs in your portfolio, income, not growth. At least not in the way you are thinking about it.
Member
Sep 18, 2016
289 posts
235 upvotes
the union is hurting LB, that is also the reason why no other big bank has swallowed them yet.
Index Investors, the Vegans of the Investing Industry
[OP]
Jr. Member
Jul 16, 2020
130 posts
23 upvotes
1Ogiku2 wrote: the union is hurting LB, that is also the reason why no other big bank has swallowed them yet.
Ok
[OP]
Jr. Member
Jul 16, 2020
130 posts
23 upvotes
CIBC has union too. Is it?
Sr. Member
Jun 28, 2018
758 posts
498 upvotes
Toronto
Don’t think of it in terms of highs and lows for banks. Right now the story for banks are their actual business models in this modern era with fintech, revenues, and credit loss reserves during Covid. Incidentally, Covid gives them a good excuse to continue laying off more people as more operations are impacted by technology.

You see ry up because they have been doing well during this time. Surprisingly cm has as well.

Even Td has not rebounded. Bns has unique set of issues because they have a focus on Latin America.

Lb has issues because they have been trying for years to modernize. During this time their revenues have been getting hit and the dividend became increasingly unsustainable.

Predictably, if anyone watched their basic financials, they slashed their dividend significantly in the second quarter. This is a positive though as it shows they are more serious about turning around or .... they didn’t have a choice. https://www.globenewswire.com/news-rele ... hares.html

They even had a significant problem with their mortgage division before this, which they scrambled to fix under supervision of regulators. It showed the bank back office operations is ... inefficient. https://financialpost.com/pmn/business- ... w-resolved.

Their CEO abruptly left the company and their COO followed not long afterwards (Feb 2021). https://www.bnnbloomberg.ca/laurentian- ... -1.1450642

https://money.tmx.com/en/quote/LB/news/ ... da_in_2021

Maybe just maybe they will be successful in turning around, but we’ll see. Their last quarter was helped, along with some other banks, by reducing loan loss reserves.

https://financialpost.com/news/fp-stree ... ing-profit

Personally, i wonder if they’ll one day merge with CWB to create the seventh largest bank in Canada (still far from national bank #6) that ties west and east. With no permanent CEO, maybe it’s more likely?
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:

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