Bank Of Nova Scotia Stock (BNS) Trade Alert for Aug 26 2014

The earnings this morning from Bank of Nova Scotia were quite good. Bank of Nova Scotia raised its dividend another 2 cents per quarter or 3.1% as it reported decent returns although investors may want to look at a number of key areas for future growth potential.

A big portion of the gain was from the sale of its stake in CI Financial Corp. The sale of CI Financial generated a $555 million gain or added 45 cents per share. BNS reported a profit of $2.35 billion, or $1.85 per diluted share, for the quarter ended July 31 which compares to $1.75 billion or $1.36 per share for the same quarter last year.

Excluding the deal and other one-time items, the bank’s adjusted net income was $1.79 billion, which was up eight per cent from $1.65 billion on adjusted earnings per diluted share of $1.40. Analysts though had estimated earning at $1.41 so we could see further weakness in the stock. Total revenues were $6.48 billion compared with $5.51 billion for the same period last year.

If we remove CI Financial from the picture, net income was still up by 6 percent but the bank revenue and earnings were not quite as strong as Royal Bank of Canada (RY) or Bank of Montreal (BMO). Profits from its personal and commercial banking in Canada division rose three per cent. Loan losses rose due to increased business loans.

However a drop of 16 percent in profits from its international banking arm indicated the weakness of operations in the Caribbean and Central America. This has to concern investors as the remaining Canadian Banks have taken no lead positions in either the Caribbean or Central America citing concerns about banking growth opportunities lacking in both those areas. Bank of Nova Scotia may be proving them correct in their outlook. This will definitely keep the stock under pressure and more volatile than its peers.

Here is the latest trade in BNS Stock and the outlook for BNS Stock into the fall quarter. This article is for members of FullyInformed Canada.

FullyInformed Canada Members can can review the latest BNS Stock trade alert and strategy discussion directly through this link or they can sign in to the full Canada members site here. Non-members can join here or read about the benefits of being a member.

Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.