HCG got to our target of $32 in just a day, faster than we expected. It is a buy here in our opinion. Volumes were down and the company guided lower, there was some insider trading for a Mickey Mouse amount and the only big event was a downgrade by RBC DS to a target of $39. Why anyone would bother to read such “analysis” is beyond me. Nine investment dealers together have an average target of $51.88, this is after the downgrades. BNS is still at $51.
For the reader I included some of they key metrics of this company. The dividend yield is almost 3% but the P/E is at an amazingly low 7X, about 1/2 of that of the banking industry as a whole. They are small enough to grow in such ways as they choose and large enough to enjoy the benefits of scale. Management is pretty smart and does not suffer from the myopic outlook on banking that is so common among the oligopolists. We would put this stock on our “Conviction List” if we had one, a list that is.