HCG CN

Home Capital Group

Finance/Real Estate, Event Driven/Special Sit


Presented:05/02/2013
Price:CA$28.45
Cap:$1.58B
Current Price:CA$44.26
Cap:$1.35B

Presented

Date05/02/2013
PriceCA$28.45
Market Cap$1.58B
Ent Value$1.58B
P/E Ratio12.66x
Book ValueCA$8.23
Div YieldN/A
Shares O/S69.20M
Ave Daily Vol180,000
Short Int2.00%

Current

PriceCA$44.26
Market Cap$1.35B
Home Capital Group Inc., through its subsidiary, Home Trust Company, provides deposit, mortgage lending, and retail credit services in Canada. It operates through Mortgage Lending, Consumer Lending, and Other segments. The company provides various deposit products, such as certificates of deposit, investment certificates, registered retirement savings plans, registered retirement income funds, and tax-free savings accounts. It also offers residential and non-residential mortgage lending, securitization of insured mortgage loans, and secured loans. In addition, the company provides consumer lending services comprising deposit secured credit card services for individuals; payment card services; and individual loans to customers of retail businesses, as well as engages in treasury and security investment businesses. It operates branches located in Ontario, Alberta, British Columbia, Nova Scotia, Quebec, and Manitoba. Home Capital Group, Inc. was founded in 1977 and is based in Toronto, Canada.

Please note, this stock split on 03/11/2014 at a ratio of 2/1. The presented data has been updated to account for the change, however, the text of the note may refer to data based on the original presented price of $56.90.

Highlights

The Canadian real estate market is flashing a number of signals reminiscent of the period immediately prior to the US housing market taking a material turn for the worse. The presenter is bearish on Home Capital Group (HCG) due to a number of risks, including its $8.5 billion (CAD) exposure to problem loans and paltry 0.9% provision for loan losses, among other issues. He discussed the following points supporting his negative stance and belief the company’s shares could drop to the $20s on any increase in stress in the Canadian housing system:

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Idea Discussion

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