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MoneyDon’t Panic Over Tumbling Stocks in the TSX Index!

11:55  07 december  2018
11:55  07 december  2018 Source:   fool.com

Toronto stocks down, U.S. markets also fall

Toronto stocks down, U.S. markets also fall Toronto stocks down, U.S. markets also fall

Stock charts on Bloomberg also don ’ t show the big decline in Loblaw’s share price, while on Yahoo Finance – depending on the type of chart you create – some In that case, the loss would be denied for tax purposes. Nor could you sell an ETF that invests in the S&P/ TSX composite index – such as

The Toronto Stock Exchange (often abbreviated as TSX ) is a stock exchange in Toronto, Ontario, Canada. It is the 12th largest exchange in the world by market capitalization.

Don’t Panic Over Tumbling Stocks in the TSX Index!© Provided by Fool Bank sign on traditional europe building facade

It’s been a relatively tough year for investors. After becoming used to the highs of 2016 and 2017, investors watched the S&P/TSX Composite Index drop about 7% since the beginning of 2018.

At a time like this, investors turn to Canada’s Big Five banks for stability. But which of the five holds the most value in this increasingly volatile market? While it may not be the biggest bank in Canada, it’s my humble opinion that the Canadian Imperial Bank of Commerce (TSX:CM) (NYSE:CM) provides the most value.

High Growth at a Cheap Price

I was one of millions of people scouring stores and websites to find the best deals on Black Friday, and it got me thinking. People are so happy to see sales in stores, but the complete opposite holds true for stocks. We celebrate highs and fear lows, when really we should see them as “on sale.”

North American stocks plunge in early trading

North American stocks plunge in early trading North American stocks plunge in early trading

Utility stocks have beaten the S&P 500 in two months of turbulence and in the long run. U.S. stocks carved out solid gains on Friday after a U.S. official hinted that a trade deal between the U.S. and China would be struck at the G-20 meeting in Cobas Asset Management Commentary: Euphoria and Panic .

Market Activity. Composite Indices . Toronto Stock Exchange . Capital Formation. Toronto Stock Exchange . TSX Venture Exchange. TSX Private Markets. The Exchanges have provided companies with access to equity capital for over 160 years.

This is the case for CIBC. The bank announced its quarterly earnings on 28 November and it didn’t meet analyst expectations. Earnings per share rose to $3.00 with analysts forecasting $3.04. This number has swamped headlines, yet it’s the first time in 15 quarterly cycles that the bank hasn’t exceeded analyst expectations!

So let’s turn away from that number for a second and note that it was still a strong quarter for CIBC. The bank reported net income of $1.36 billion, up from $1.26 billion a year ago. Its one-year past earnings growth of 14.5% beat the Canadian banking industry’s average of 10%, and CIBC’s own five-year average of 10.3%. Many analysts attribute this increase to the bank finally earning outside of Canada.

America the Beautiful

Honestly, CIBC could not have had this strong year without expanding into the United States. After acquiring PrviateBancorp last year, CIBC’s U.S. region almost doubled from 9% to 16% this year, making their goal of 17% by 2020 look practically certain. This expansion has already delivered earnings of $131 million, up from $107 million a year ago.

Dovish tone from U.S. Fed helps stocks

Dovish tone from U.S. Fed helps stocks Dovish tone from U.S. Fed helps stocks

You may feel like pulling your money out but most of the market’s 10 best days over the last 20 years have occurred within two weeks of the 10 worst days.

The S&P/ TSX Composite Index is the benchmark Canadian index , representing roughly 70% of the total market capitalization on the Toronto Stock Exchange ( TSX )

Investors can be thankful CIBC is finally able to take advantage of a strong American economy. The bank is likely to continue this expansion, but it won’t be cheap. So that’s why I have yet another recommendation.

Buy it and Forget it

CIBC warned investors in its quarterly earnings report that while it will be enhancing its U.S. business with some major deals, it’ll be expensive. This means the bank’s return on equity will likely go down. The bank also stated that global economic uncertainty and trade tensions could bring earnings growth to the bottom of their target 5-10% range next year. This has brought shares near their 52-week low at the time of writing this article.

But investors should see this as an opportunity to buy this stock while it’s relatively cheap. With analysts valuing the stock at between $130-$150, that makes the current price of about $111.50 look like a Black Friday sale.

Futures down as oil prices fall; trade talks in focus

Futures down as oil prices fall; trade talks in focus Futures down as oil prices fall; trade talks in focus

Cannabis stocks stumbled for the second day in a row on Thursday, raising concerns of panic in the Other indices fared about the same, with The Cannabis Stock Index , which The advisory firm further noted that Aurora Cannabis’ ( TSX :ACB) hostile bid would be a “dilutive” one for shareholders.

The Toronto Stock Exchange - or TSX - is one of the largest stock exchange in the world. With Canada housing extensive natural resources, the TSX is the single most important exchange for natural resource focused companies engaged in energy or other commodity markets.

The Bottom Line

Now you could wait and see if this stock goes down even further, but one thing is for sure: it won’t stay there long. While you’re refreshing your stock screener, you might miss the chance to buy this high-value stock at such a discount before it heads back into the high teens.

And while you may not see earnings immediately, you will see a decent dividend of 4.79% while you wait. So my advice? Stop trying to figure out the world’s economic problems and buy this blue-chip while it’s down.

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Amy Legate-Wolfe does not have a position in any of the stocks mentioned in this article.

An all-Canadian $75,000 TFSA looking for global dividends.
One woman’s search for income-producing securities

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