The worst seems to be over for Canada in terms of COVID-19, but the economic impact is going to linger a while longer – there’s evidence of a recovery off the bottom, but indicators like the BMO Business Activity Index still show about a 20% gap from where the economy was prior to COVID-19. As a primarily commercial lender, the health of Canada’s economy is a direct concern for Canadian Western (OTCPK:CBWBF) (CWB.TO), and while economic activity should improve, I wouldn’t just assume the company is completely out of the woods with respect to credit.
I wasn’t excited about the prospects for Canadian Western back in December of 2019, but that was before COVID-19 whacked the entire sector. Canadian Western has done generally okay since then, and I like the recent progress on funding, but the valuation is not as appealing here as for many other banks around the world, and it’s still more of an “okay, I guess” idea for me than a compelling buy with the shares having nearly doubled from the late March lows.
Read the full article here:
Canadian Western Continues To Deliver On A Successful Long-Term Transformation Plan
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