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Trevor Phillips
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A former business owner (and stock options speculator) turned financial advisor, Trevor Phillips does his own analysis of everything he invests in. He hopes to work in the hedge fund industry at some point in the future.
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  • CIT trade review....

    The trade I suggested Friday (long CIT.C preferred, short CIT common) looks like it's panning out pretty well if you were able to get a borrow on the short side.  CIT common has risen dramatically as a rescue package from bondholders came to light.  However, as expected, the preffered shares outperformed by decent margin.  I'd expect more of the same as the company tries to restructure it's balance sheet by diluting common shareholders to help make whole it's debtholders.

    Tags: CIT
    Jul 20 12:50 PM | Link | Comment!
  • The Canadian Bank Play for Today's Market

    In case you haven't noticed, the canadian banks are absolutely on fire.  They've rebounded from their lows nearly all the way back to pre-October '08 levels.  The big 5 now trade at 2 or 3 times book value and many savvy investors are wondering if they've gone too far.  Canadian Western Bank, by contrast, trades at 1.42x book value (16.25/11.42).  Canadian Western bank is out of favor right now but remains very profitable. The bank has suffered from net interest margin compression as their loan book adjusts gradually to falling interest rates.  Now that interest rates have been flat for awhile, I expect those margins to start improving.  Better still, when rates do finally rise, the reverse effect will play out, driving strong profits and improved spreads on loans.  The market is overestimating the risk here as management has built a very strong loan portfolio with no exposure to CMBS, CDO, RMBS or any of the supposedly toxic loans the other banks all hold.  Given the relative valuation based on either earnings or book value, I think you can sell TD (currently 60.36) and buy CWB at 16.25. 

    Disclosure:  Long CWB

    Jul 15 11:41 AM | Link | Comment!
  • Hartford trade update

    As I write, Hartford is trading at day highs, now 11.93/share.  The CMBS Markit index has strengthened some of late and equity markets continue to stabilize.  I still think this trade has a very good risk/reward profile.  I believe the stock will be about $40 in a year's time if the markets stay on their upward slope.  If it gets to18-20/share, it will be worth re-evaluating the trade to see if the risk/reward is still tilted in your favor.

    Tags: HIG
    Jul 15 11:24 AM | Link | Comment!
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