Exiting Home Capital
Home Capital Group (HCG.TO) operates through its subsidiary, Home Trust Company a federally regulated trust company that offers deposits, residential and non-residential commercial mortgage lending, retail credit, credit card issuing services and consumer lending. Home Trust offers deposits via brokers and financial planners, and through Oaken Financial. Home Trust has branch offices throughout Canada.
[PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'HCG.TO'" symbolprices="30" div_align="right"]
Profit estimates for HCG have fallen drastically over the last few months due to the oil related slowdown in the western Canadian economy.
When we initiated our position, the 2017 EPS consensus estimate was $5.58 per share, today it is $3.85. Our job at Purple Chips is to avoid risk; therefore we are exiting at break-even.
The Purple Chips 12 -18 month valuation range is: low $0, high $38.
EXIT HOME CAPITAL GROUP AT $32.70 (HCG-T)FULL POSITION
TOTAL RETURN (including dividends): NIL
PURPLE CHIPS TARGET: $38.00 POSITION SIZE: FULL (5.0) P/E: 7.9X DIV: .88 (2.7%) MKT CAP: $2.3B Debt: $3B RETURN ON CAPITAL: N/A EARNINGS YIELD: 10.7% 5 YR EPS Growth rate*:0% P/E/G Ratio: N/A EPS: $4.13 2017 EST.: $4.19 2018 EST.: $3.85
*Blended growth rate= 2/3 historical (5yrs), 1/3 forward.
