Seeking Alpha: Has Fear Opened A Door Into Canadian Western Bank?

If you tried to base a drinking game on the number of times I write something to the effect of "I really like this company, but the shares aren't cheap enough", you could probably do some serious damage to your liver. In the case of Canadian Western Bank (OTCPK:CBWBF) (CWB.TO), it seems as though a long-awaited opportunity to buy the shares of a small but well-run Canadian regional bank may finally be here.

Of course, opportunity comes with its own cost. In this case, it is the risk that low oil prices hang around for a while and seriously damage the company's business in Western Canada (Alberta in particular). The recent election of a left-leaning, not exactly business-friendly, party in Alberta also doesn't help, and so now investors are worrying about the potential impacts to CWB's loan growth, net interest income, and profitability.

Energy is too important to the economy of Alberta for me to say that oil prices are an overplayed issue with CWB. That said, I think it takes a pretty dire scenario before CWB is in serious trouble. While the downside risk is potentially large, I don't currently think it's particularly likely (high severity, low frequency to use insurance terminology) and I think the shares offer an interesting level of value today. Before going further, I would advise investors who decide to buy the shares of this company to do so on the Toronto stock exchange, as the liquidity is better (and most brokers now do this for reasonable commissions).

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Has Fear Opened A Door Into Canadian Western Bank?