Monday, January 7, 2008

doubled Bank of Nova Scotia position

I started a position in the Canadian bank, Bank of Nova Scotia (BNS) at around $47.50 during a steep sell off back in August, 2007. For my comments on the bank, please see my 'bought some BNS' post.

Today I added to my BNS position by doubling my stake in the internationally oriented bank. I paid $47.39/share today; therefore before fees I bought the bank at a yield of 4.0%, and a P/E of 11.7x earnings. My models suggest that Scotia is very undervalued at it's current price. The stock is currently priced for anemic growth going forward. I believe it offers compelling value down here at its current level.

Bank of Nova Scotia has a superb earnings growth record, is very efficient, and is diversified between domestic operations and significant non-U.S. assets. They have also proven themselves as a swift grower of dividends over the long term.

3 comments:

FinancialJungle said...

I believe that's a good call. I also padded my BNS position by ~15% more. Good luck to us both!

Middle Class Millionaire said...

MG,
A good long term buy. I'm pretty bad at predicting short term moves but in 10 years I think this would have looked like a great buy. I'm looking at BNS and CM also.

MG said...

Thanks for the comments.

I don't think there is anyone alive that is good at predicting short term moves.