BCV Bulletin - Recent Trading Activity - November 19, 2024
SELL: Toronto-Dominion Bank (TSX: TD)
BCV has made the decision to exit our position in Toronto-Dominion Bank. TD has been a long-term, core holding at BCV and historically has been one of Canada’s premier financial institutions. The recent findings related to failures in the bank’s anti-money laundering practices, and subsequent fines, restrictions on growth, and reputational damage have materially impacted the business and investment prospects. As a result, we are no longer confident in the company’s ability to deliver an acceptable rate of return over our investment time horizon and have decided to re-allocate the proceeds to other opportunities within our portfolio.
BUY: Bank of Nova Scotia (TSX: BNS)
With part of the proceeds from the sale of Toronto-Dominion Bank, we have increased our position in Bank of Nova Scotia. BNS has navigated well through the period of high interest rates, and recently made the strategic decision to purchase a 14.9% stake in KeyCorp (NYSE:KEY), a Cleveland-based financial services company. At the same time, management is focused on creating more value from its international operations, while continuing to grow its highly profitable Canadian business. We believe that BNS shares continue to present a compelling long-term investment opportunity, with an attractive 5.5% dividend yield, reasonable current valuation, and multiple avenues to achieve their long-term earnings per share growth target of >7%.
BUY: Boyd Group Services Inc (TSE: BYD)
We have increased our position in Boyd Group Services Inc., an automotive collision and glass repair company. During its latest quarter, Boyd indicated that the industry continues to be pressured by lower repairable claims collision volumes; however, they do not view the decline in claims as structural and expect a bottom to be reached in 2025. Despite industry challenges, Boyd continues to outperform the industry and take market share through the internalization of calibration. They remain laser focused on removing costs and expect margins to improve going forward. Furthermore, despite muted acquisition growth in 2024, they expect their acquisition strategy to accelerate in 2025. The current valuation of the company provides an attractive entry point.
This BCV Bulletin is intended for residents of the provinces and territories in which we are registered, is not meant to be a solicitation to any persons not resident in those jurisdictions and does not constitute an offer to buy or sell our products or services. Any opinions expressed are just that and are subject to change. Information is provided on a best-effort basis and its accuracy cannot be guaranteed. Information may also be provided from third party sources which are believed to be reliable, but we do not guarantee its accuracy or completeness. Certain statements may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This BCV Bulletin has been prepared for general informational purposes only, is not intended as investment and/or financial advice on any subject matter and the securities mentioned should not be construed as a recommendation for any specific securities. ©BCV Asset Management Inc. 2024.
