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Global stocks Shares

Cushman & Wakefield Excellent Recovery in First Half of 2021

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a boom in the commercial real estate services industry since the nadir of the real estate-driven global financial crisis of 2007. As the third-largest player in the space by market cap, Cushman & Wakefield has benefited disproportionately from various tailwinds that have underpinned an impressive run of growth. Key to this success has been the company’s industry-leading brand reputation and a platform that melds complementary business lines in areas such as property sales, leasing, project management, and outsourcing to serve its corporate and institutional clients.

Although Cushman & Wakefield nominally reports its segments on a regional basis, it also discloses the amount of revenue coming from each business line. Among these, the property, facilities, and project management business is the largest and also the most stable, providing contractual revenue from corporate customers. This business line, which contributes around 54% of companywide revenue, is where Cushman & Wakefield provides many of the services needed by corporations that occupy real estate. 

Finally, the company’s valuation and other business line include several services for corporate and institutional clients, which include appraisals that are used for various purposes. The leasing business line is Cushman & Wakefield’s second largest, contributing around 23% of companywide revenue. In this business line, the company’s brokers work with owners and occupiers of commercial real estate during the leasing process, primarily by executing lease agreements. Similarly, the capital markets business line, which contributes around 14% of companywide revenue, is where brokers facilitate the sale and purchase of commercial real estate property.

Financial Strength

Cushman & Wakefield has somewhat concerning financial health. Commercial real estate is highly cyclical and is subject to significant volatility during downturns, meriting a more cautious approach. Cushman & Wakefield’s higher level of leverage is the result of an aggressive acquisition strategy that has helped cement the firm’s position as a global provider able to compete effectively with CBRE and JLL. In response to the corona virus crisis, Cushman & Wakefield announced it would issue $650 million in senior notes, bringing further attention to its borderline precarious financial situation. 

Bull Says

  • As one of the largest of only a few truly international one-stop shops, Cushman & Wakefield is poised to continue taking share from competitors in a growing industry that increasingly rewards scale.
  • The trend of corporate outsourcing represents a significant opportunity and area of growth for Cushman & Wakefield.
  • Cushman & Wakefield is emerging as an authority on the topic of workplace protocols amid the corona virus era of social distancing, which will allow it to win new outsourcing contracts with major clients.

Company Profile

Cushman & Wakefield is the third largest commercial real estate services firm in the world with a global headquarters in Chicago. The firm provides various real estate-related services to owners, occupiers and investors. These include brokerage services for leasing and capital markets sales, as well as advisory services such valuation, project management, and facilities management.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Technology Stocks

AMN Healthcare Fair Value Estimate to be raised to $71

investment stockbroker risk analysis using multiple devices. Financial analysis using phone app and laptop. Market trading profit.

though recent performance represents a new normal. The company’s fair value estimate has been raised on narrow-moat AMN to $71 per share, up from $55 previously. Labor shortages and resumed healthcare utilization kept revenue up this quarter. Management’s third-quarter guidance provides some clarity for 2021 results, suggesting a sharper decline in the third quarter, which will stabilize in the fourth quarter.

Nursing and Allied revenue fell only 5% sequentially this quarter due to lower nursing volume and bill rates, offset by higher allied revenue. This decline was less than anticipated due not only to lingering COVID-19-related activity but also a thin labor market. A resurgence in patient volume combined with nurse burnout and resignations may limit further declines after third quarter, too. 

Physician and leadership solutions was down 1% sequentially, as COVID-19-related demand mostly ceased in the first quarter, while demand for physician and leadership search remains strong due to vacancies. Technology and workforce solutions grew by 6% sequentially, and the SaaS business should continue its rapid growth, though at a reduced pace as the firm exhausts its lower-hanging partnership opportunities. Gross and operating margin percentages remained stable from the first quarter. 

Company’s Future Outlook

It is expected margins to steadily improve over the next few years, as the technology and workforce solutions segment will be a major driver of margin improvement, eventually overtaking physician and leadership solutions as the second-largest segment. AMN’s recent surge is consistent with the cyclical nature of this business, and is not believed this year represents a suitable point from which to anchor forecasts. Prior history shows that the firm does extraordinarily well during years of growth when need is high but it quickly reverts to baseline industry growth in the years thereafter.

Company Profile

AMN Healthcare Services Inc (NYSE: AMN) is the largest healthcare staffing company in the United States. In 2019, it placed almost 10,000 nurses and allied healthcare full-time workers with provider clients nationwide. About two thirds of its business is generated from its temporary nursing division; the other third is generated from its physician placement and technology-backed workplace solutions divisions.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Global stocks Shares

Auckland Airport Taxis on the Runway with 2% Increase in FVE

with wide-moat Auckland Airport’s annual result offering fiscal 2022 guidance on what the airport will spend (on capital programs), but no guidance on what it will earn (for example revenue from passengers). Fair value estimate increases 2% to AUD 6.70 for the Australian listing due to time value of money. The shares screen as fairly valued at current levels. The New Zealand government has indicated that once vaccination rates increase, the plan is for a phased reopening, so long as that remains supported by the medical science.

The more cautious response to the pandemic in Australia and New Zealand means restrictions are unlikely to be largely removed until midway through fiscal 2022, a further recovery in the economy, consumer confidence in long-haul travel to rebuild, and a reigniting of the logistics needed to support mass travel, including travel agents, tour operators, business conferences, and so on.

The experience elsewhere in the world supports this view, with other highly vaccinated developed markets gradually removing restrictions. The pandemic’s notoriety was elevated in 2020 with the outbreak of corona virus on the Diamond Princess, but even the cruise industry has now restarted services in parts of the world. The company’s base case remains that virus concerns eventually fade, and passengers get back on board boats and airplanes.

Company’s Future outlook

It is believed that the air travel will recover to pre-pandemic levels. Air New Zealand’s fiscal 2021 domestic passenger capacity averaged a respectable 77% of pre-pandemic levels. Across the Tasman, Qantas was slower for the year, due to more frequent restrictions in Australia. However in the fourth quarter, a period which was relatively virus and restriction free nationwide, Qantas achieved domestic passenger traffic at 95% of pre-pandemic levels. Admittedly domestic travel in both nations was likely boosted by the inability to travel abroad. However, this is largely offset by the absence of international travelers taking domestic flights, especially in New Zealand, where nearly all international arrivals enter the country through Auckland Airport.

Company Profile

Auckland Airport is New Zealand’s largest airport, handling 21 million passenger movements in fiscal 2019, approximately 70% of the country’s international visitors. It owns 1,500 hectares of land, and hosts ancillary commercial services, including retail and duty-free, car parking, hotels, warehouses, and offices. Substantial development opportunities could bring its capacity up to nearly 26 million passenger movements per year anticipated by 2026, as well as adding capacity in the ancillary services offered. It also has a minority stake in the small but fast growing Queenstown airport on New Zealand’s south island.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Dividend Stocks Expert Insights

MFG’s reduced the performance fee for the FY21

Investment Thesis

  • Principal Investments have the potential to become a significant contributor to group performance in the medium- to long-term.
  • Due to the recent de-rating, MFG no longer trades at a significant premium to its peer group.
  • Acquisitions may help to pave growth runways, easing the Company’s fund capacity constraints.
  • The average base management fee (bps) per annum (excluding performance fee) remains stable, but fee pressures pose a risk to the downside (which is an industry trend not specific to MFG alone).
  • Strategic  growth performance, particularly in the global and infrastructure funds.
  • Increasing amounts of money are being managed.
  • New strategies could significantly increase the addressable market and aid in the maintenance of earnings growth.

Key Risks 

  • Fund performance has declined.
  • The risk of potential fund outflows – both retail and institutional – (loss of a large mandate).
  • Acquisitions carry a high level of execution risk.
  • Crucial quality man risk exists in the immediate vicinity of Hamish Douglass and key management or investment management personnel.
  • New strategies fail to generate significant earnings for the group.

Key Result of FY21

  • Adjusted revenue was $699.1 million, largely unchanged from the prior year, with the Funds Management business continuing to perform well (management and service fees increased by 7% to $635.4 million).
  • Profit before tax and performance fees in the Funds Management business increased by 10% to $526.6 million, driven by a +9% increase in average FUM to $103.7 billion (total net inflows of $4.5 billion).
  • The Board declared a dividend of $1.141 per share (75 percent franked) for the six months ending 30 June 2021, consisting of a final dividend of $1.026 and a quality fee dividend for the year of $0.115 per share, bringing total dividend payouts for the year to $2.112 per share, down -2 percent over pcp, and announced a share buyback plan to allow stockholders to reinvest their dividends at a 1.5 cents rate.

Company Profile 

Magellan Financial Group Ltd (MFG) is a specialist funds management business. MFG’s core subsidiary, Magellan Asset Management Ltd, manages ~$53.6bn of funds under management across its global equities and global listed infrastructure strategies for retail, high net worth and institutional investors.

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Commodities Trading Ideas & Charts

Following strong first-half results, the Oil Search dividend has been reinstated.

Investment thesis

  • Positive trends in the sale of Alaskan equity interests.
  • Following the recent capital raising, the balance sheet is in good shape. More deleveraging will be beneficial as well.
  • Globally appealing assets with a favourable cost structure.
  • Although expensive, downside hedges to lower oil prices are a good thing in the event of a black swan event.
  • Possible M&A activity.
  • Rising oil and gas prices

Key Risks

The following are the key challenges to the investment thesis:

  • Global oil and gas markets are experiencing a supply and demand imbalance.
  • Lowering of oil and LNG prices.
  • Disruptions in production.
  • Execution risk associated with LNG expansion.
  • Adverse policy changes in PNG (the government is a major backer of the project).

Highlights of key FY21 results

  • Revenue of $667.7 million was up +7% as the oil and LNG markets recovered from the initial effects of Covid-19 (average oil and condensate realisation of $64.66 was up 80% over the pcp). Total production was 13.5 million metric tonnes, a -8 percent decrease from 14.5 million metric tonnes. 
  • EBITDAX of $488.8 million increased by 8%.
  • Core EBIT of $278.8 million increased by 88 percent. OSH is on track to achieve a 40% reduction in underlying operated opex by 2023. Free cash flow increased significantly to $284.3 million (up from $12.8 million in 1H20). 
  • OSH made a revenue of $139.0 million, a huge improvement over the -$266.2 million reported in 1H20. Given the LNG price lag to Brent, management expects solid operating cashflows to continue in 2H21.
  • Net debt fell -11 percent to $2,122.2 million. Gearing was reduced from 29.9 percent to 27.2 percent in the pcp. Under financial covenants, OSH has significant headroom, according to management. 
  • The Board declared an interim dividend of US3.3 cents per share, representing a payout of 49 percent of NPAT and consistent with OSH’s dividend policy of a target payout ratio of 35 to 50 percent of core NPAT.

Company Description  

Oil Search Limited (OSH) explores for and produces gas and oil through operations in Papua New Guinea. The company’s activities are located in the Papuan Highlands which include Kutubu, Hides, and Gobe oil and gas projects.   

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Philosophy Shares Small Cap Technical Picks

Pact Group’s stock price has risen as a result of a 100% dividend increase.

Investment thesis

  • Strong market share in Australia, with a strong influence in Asia. As a result, it offers appealing exposure to the growth of both developed and emerging markets.
  • The corporation’s newly appointed CEO brings a fresh perspective on company strategy, which can restructure the company for strong volume growth.
  • Based on our projections, the valuation is reasonable.
  • Going forwards, management appears to be less centred on acquired growth, implying that the Company is less likely to make a value-destroying acquisition.
  • The reintroduction of the dividend is a positive sign that management is optimistic about future earnings growth.
  • In an environmentally friendly market, focusing on sustainable packaging.

Key Risks

The following are the key challenges to the investment thesis:

  • Increased competitive pressures, resulting in further margin erosion.
  • Cost pressures on inputs that the corporation would be unable to pass on to users.
  • A worsening in Australia’s and Asia’s economic conditions.
  • The risk of emerging markets.
  • Poor acquisitions or failure to meet synergy targets as PGH shifts away from packaging for food, dairy, and beverage clients and towards more high-growth sectors such as healthcare.
  • Negative currency movements (purchased raw materials in U.S. dollars)

Highlights of key FY21 results

  • Revenue fell -3 percent to $1,762 million, while underlying EBITDA increased by 4% to $315 million, underlying EBIT increased by 10% to $183 million (EBIT margin increased by 120 basis points to 10.4 percent), and underlying NPAT increased by 28% to $94 million. The positive motivational drivers of group EBIT growth over the year were: margin improvement (+$10m) as a result of disciplined raw material input cost management; volume growth in Packaging & Sustainability (+$9m); and volume increase in Materials Handling & Pooling (+$15m).
  • As a result of strong operating performance and working capital management, cash flow performance improved, with free cashflow increasing by +44 percent to $104 million. 
  • Balance sheet gearing decreased slightly year on year, working to improve to 2.4x (within the targeted range of 3.0x) from 2.6x. The company has $317 million in liquid assets (undrawn debt capacity). 
  • Strong capital returns, with a +120bps increase in ROIC to 11.8 percent. The Board declared a final dividend of 6cps (65 percent franked), helping to bring the year’s total dividends to 11cps (vs 3cps in the pcp).

Company Description  

Pact Group Holdings Ltd (PGH) was established by Raphael Geminder in 2002 (Mr. Geminder remains a major shareholder with ~44% and is the brother in law of Anthony Pratt, Chairman of competitor Visy). Pact has operations throughout Australia, New Zealand and Asia and conceives, designs and manufactures packaging (plastic resin and steel) for many productsin the food (especially dairy and beverage), chemical, agricultural, industrial and other sectors. 

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Global stocks Shares

Domino’s Pizza is taking the next step of growth and has released its FY21 results.

Investment thesis

  • Potential for solid growth in Europe and Japan, with significant opportunities that the Company is well positioned to capitalise on.
  • DMP has a strong position in the market in all of its existing geographies.
  • DMP is ahead of the curve in terms of technology and innovative customer offerings.
  • Merger in Europe to increase top-line revenue.
  • A solid management team.
  • Aiming for higher margins (i.e. operating leverage benefits).

Key Risks

The following are the key challenges to the investment thesis:

  • Acquisition integrations are not proceeding as planned.
  • Failure to meet market expectations for sales and earnings growth.
  • Dietary concerns that compel customers to seek out healthier alternatives
  • Input and labour costs have risen.
  • Competition-related market pressures.
  • Key management personnel have left.
  • The corporate office must increase financial assistance to struggling franchisees.
  • Any additional negative media coverage, particularly regarding underpayment of wages at the franchisee level.
  • Any new concerns about store rollout (such as cannibalisation or demographics not supportive of new stores).
  • Commodity prices have risen as a result of Australia’s ongoing drought.

Highlights of key FY21 results

  • FY22 has begun on a strong footing, with 2,974 stores (including 26 opened this fiscal year) delivering +7.7 percent network sales growth (+2.7 percent on a Same Store basis)… With a two-year cumulative Same Store Sales growth of 13.7 percent, Domino’s is trying to demonstrate sustainable growth by retaining customers from the pandemic’s initial peaks.
  • The 3-5 Year Outlook for New Store Openings has increased to +9-12 percent (up from +7-9 percent),” with management stating that “a review of our modelling has increased our expectations for Benelux (+200 stores) and Japan (+500 stores), and now expects to operate 6,650 stores by 2033.
  • DMP reaffirms its 3-5 year Same Store Sales forecast of +3-6 percent.
  • The 3-5 year net capex outlook has been raised to $100-150 million (up from $60-100 million) as DMP assists franchisees with store expansions.
  • The Board has determined that it will increase its payout ratio from 70% to 80% in recognition of this new phase in Domino’s growth and the expected free cash flow.

Company Description  

Domino’s Pizza Enterprises Limited (DMP) operates retail food outlets. The Company offers franchises to the public and holds the franchise rights for the Domino’s brand and network in Australia, New Zealand, Europe and Japan. 

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Global stocks

Panasonic’s Faster Than Expected Recovery Led by Auto and Data Center Demand

Panasonic has implemented a huge restructuring several times, approximately for every 15 years, and recovered its profitability each time. On the other hand, we doubt Panasonic’s capability on strategic investment, as the company failed to address the changing environment in the global consumer electronics industry and consequently did not generate sufficient return from past investments. In fact, Panasonic’s revenue has been unchanged at around JPY 7 trillion-JPY 8 trillion, and its operating margin has ranged between 1% and 5% for more than two decades. 

Financial Strength 

Panasonic has a very strong financial position, with net cash of JPY 288 billion (USD 2.7 billion) at the end of March 2016, having improved its balance sheet from a net debt position of JPY 1 trillion (USD 9.5 billion) at the end of 2012. This improvement has been achieved through a combination of improved operating cash flow performance (the company produced an operating cash flow loss in 2012 but generated a combined JPY 1.80 trillion in operating cash flow over 2013-15), as well as sales of investments and property, plant, and equipment.

Panasonic’s June-quarter revenue was 29% up from the previous year exceeding our expectations. The automotive segment’s sales were 1.8 times as large as the previous year driving the revenue growth because of the lower base due to the pandemic. The appliance segment’s sales were 22% up from the previous year as demand for flat-panel TVs and digital cameras recovered. Revenue for the industrial solutions segment was 24% up from the previous year as a result of robust investment for semiconductors and data centers. Panasonic’s revenue and operating income forecast for fiscal 2021 to JPY 7.3 trillion and JPY 390 billion from JPY 7.15 trillion and JPY 360 billion, respectively. Our new operating income forecast is 51% up from the previous year, driven by automotive, connected solutions, and industrial solutions segments. 

Bulls Say’s 

  • Panasonic has plenty of “one-off” earnings and cash flow upside available through exiting unprofitable products.
  • If Panasonic can hit its fiscal 2019 corporate plan targets, it will generate earnings and cash flow growth that should support a higher valuation.
  • Panasonic’s leading position in electric vehicle batteries puts it in a very strong position in a potentially revolutionary technology.

Company Profile 

Panasonic is a conglomerate that has diversified from its consumer electronics roots. It has five main business units: appliances (air conditioners, refrigerators, laundry machines, and TVs); life solutions (LED lighting, housing systems, and solar panels; connected solutions (PCs, factory automations, and in-flight entertainment systems); automotive (infotainment systems and rechargeable batteries); and industrial solutions (electronic devices). After the crisis in 2012, former president Kazuhiro Tsuga has focused on shifting the business portfolio to increase the proportion of B2B businesses to mitigate the tough competition in consumer electronics products.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Philosophy Technical Picks Technology Stocks

Nanosonics Still Screens as Materially Overvalued

 as evidenced by penetration of over 75% in Australia and New Zealand and 40% in North America. Moreover, the device patent expires in 2025, leading to slower volume growth in the medium term. Moreover, the device patent expires in 2025, leading to slower volume growth in the medium term. In 2021 consumables contributed 63% of group revenue. 

Nanosonics primarily distributes via GE Healthcare, its partner across multiple geographies. We estimate consumables to roughly earn a gross margin of 85% and devices 65% by fiscal 2026. Outside of trophon, the company expects to launch a new product in flexible endoscope cleaning in 2023. Previously, management intimated the addressable market to be equivalent to trophon and there is greater awareness of the infection issue this product addresses. 

Financial Strength

Nanosonics is in a net cash position and free cash flow positive. The operating model does not require significant capital investment, with the key investments for growth stemming from ongoing R&D spending, building out a salesforce and working capital. Despite having 60-day terms from distribution partners, the current net investment in working capital runs at approximately 28% of revenue due to high inventory holding levels which average roughly 200 days in stock. phase. The company first posted a profit in fiscal 2016 and is yet to pay a dividend, nor do we expect it to in the future as it invests in underpenetrated markets and its pipeline product.

Our fair value for narrow-moat Nanosonics by 13% to AUD 3.50 following fiscal 2021 results. Roughly half of our upgrade is attributed to increasing consumable usage across the trophon installed base and the remainder due to a stronger USD. A clear highlight was second-half fiscal 2021 consumables revenue in North America, or NA, increasing 30% sequentially to AUD 33 million as ultrasound procedure volumes recovered. For the first time since fiscal 2016, new installations in NA increased year on year, with 2,490 trophon units added in fiscal 2021. 

While the second half added 1,360 new units in NA, the run-rate has significantly declined from 2,000 new installations in first-half fiscal 2017. Revenue in the region declined 1% sequentially to just AUD 3.6 million in the second half. Nanosonics is in a strong financial position with AUD 96 million in net cash at fiscal 2021 year-end. Nanosonics’ next major product, dubbed Coris, aims to automate flexible endoscope cleaning but has been delayed to calendar 2023. Details remain scant and we continue to expect uptake of Coris to mirror that of the trophon post-launch. This results in AUD 84 million in sales by fiscal 2031, or 23% of group revenue.

Bulls Say’s 

  • Nanosonics is the market leader in automated HLD of ultrasound probes with significant further market penetration potential in most regions.
  • Establishing its direct distribution model should increase the gross margins achieved by Nanosonics once it reaches critical mass.
  • The company has reached a pivotal point where higher margin consumables dominate the revenue stream. This revenue stream is also protected by patents and the installed trophon device base.

Company Profile 

Nanosonics is a single-product company and its trophon device provides high-level disinfection, or HLD, of ultrasound probes used in semi-critical procedures. The patented technology uses low temperature sonically activated hydrogen peroxide mist that is suitable for probes sensitive to damage. Automated HLD is increasingly being adopted as the standard of care globally as it is superior in preventing cross-infection across patients. Nanosonics’ revenue is made up of capital sales of trophon units, ongoing consumables sales, and service revenue. At June 2021, there were 26,750 trophon units installed globally. Market penetration rates range from over 75% in Australia and New Zealand, roughly 40% in the United States to low-single-digit penetration in EMEA and elsewhere in Asia-Pacific.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

Categories
Global stocks Shares

International Still a Drag, but Other Segments Mostly Positive for Scotiabank in Fiscal Q3

. Its domestic operations are more concentrated in mortgages and auto lending. The international exposure gives the bank the potential for higher growth and return opportunities compared with peers, but it also exposes the bank to more risks.

The bank is in the middle of rationalizing its many back-end systems and improving efficiency bankwide.The bank is continuously focusing in digitalisation and has been spending the most on its technology and communication expenses. These efforts will ultimately pay off in the form of improved operating efficiency, customer engagement, and internal sales coordination. This leads us to believe that returns on tangible equity near 15% are sustainable over the longer term for the bank.

International Still a Drag, but Other Segments Mostly Positive for Scotiabank in Fiscal Q3

Bank of Nova Scotia reported decent fiscal third-quarter earnings. Adjusted earnings per share were CAD 2.01, representing solid year-over-year growth which is higher than last quarter’s EPS of CAD 1.90. Provisioning continues to be a major driver of improved earnings. Credit costs remained solid and provisioning was low during the quarter while the bank is still holding excess reserves for future credit losses

Revenue growth continued to be lackluster for Scotiabank, up only 1% year over year as the bank’s international segment remains under some pressure and fee growth for the global markets segment faced tough year over year comps. It is expected that the international fees to continue to recover as the economic picture is improving in essentially all of Scotia bank’s Pacific .

Financial Strength:

Bank of Nova Scotia holds strong overall financial health with net revenue of CAD 30729 million and net income of CAD 6582 million in the year 2020. Nova Scotia’s reported common equity Tier 1 ratio of 12.2% as of July 2021 which remains satisfactory. This is above the 11.5% goal that management has targeted and leaves the bank well positioned to absorb the upcoming rise in credit costs. With dividend payout ratios at manageable levels between 40% and 50%, we expect its capital generation will continue to provide growth in its capital position, leaving room for future bolt-on acquisitions, increased capital return to shareholders, or both

Bulls Say

  • The Canadian market remains attractive; the government has placed barriers to entry that protect high returns.
  • The international segment’s exposure to higher growth emerging markets in Latin America will offset Scotia bank’s slower growth in its home markets and offer a runway for higher growth and returns compared with peers.
  • Scotiabank has consistently been one of the most efficient bankwide operators, and its higher relative level of spending on technology should allow this to continue.

Company Profile

Bank of Nova Scotia is a global financial services provider. The bank has five business segments: Canadian banking, international banking, global wealth management, global banking and markets, and other. It offers a range of advice, products, and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. The bank’s international operations span numerous countries and are more concentrated in Central and South America

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.