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HCG.TO: Pondering the Existential Questions Facing HCG

February 7th, 2017

It’s been an interesting start to 2017 for HCG.  The stock is down a meager (-5.0%) YTD, which belies the drastic change in investor sentiment around the company.  Several major brokerage firms have downgraded HCG shares over the past 4-6...

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Canadian Housing: Losses on the Ground Are Real; When Will the Banks Start Taking Provisions On Their Credit Exposure...

November 23rd, 2016

“As cooler weather starts driving up heating costs, Calgary distress centres are finding more people who once earned steady incomes are now struggling to pay their bills and seeking relief with...

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PAA Research's 2016 Canadian Mortgage Broker Survey: A New Era in the Canadian Housing Market

November 2nd, 2016

We recently conducted a survey of 148 mortgage brokers located across Canada. The key findings from our survey include: Home price weaknes is becoming more broad based The underlying bid for housing remains...

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Canadian Housing: The Wind of Change

October 4th, 2016

Will Monday, October 3, 2016 be remembered as the day that the housing market in Ontario peaked?  Maybe.  In a move that appears to have shaken the Canadian housing market to its core (or at least rattled a few branches), Minister of Finance, Bill Morneau announced a...

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HCG.TO: Can You See It Now? HCG Is a Shrinking Lender with Declining Margins, Enormous Credit Risk, and Potential...

July 28th, 2016

To anyone (ourselves included) that has followed the publicly available financial data on Home Trust from OSFI over the past few months, it is not a surprise that the company once again missed...

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HCG.TO: In the Biggest Housing Bull Market in the History of Canada, HCG Still Can’t Grow Their Loan Book –...

July 20th, 2016

HCG is desperate. How do we know this? Well certainly in this case actions speak louder than words.  Consider the following steps the company has taken over the past 6-12 months to shore up...

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Canadian Housing: A Tale of Four Markets, Foreign Buyers, and Fraud

May 24th, 2016

We recently conducted a survey of approximately 230 real estate agents in Canada.  The attached presentation summarizes our key findings from the survey.

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HCG.TO: Every Arrow In the Quiver Has Been Fired and Earnings are Still Declining Leaving Bulls With a Chilling...

May 5th, 2016

In the strongest housing market in the history of Ontario while taking provisions for credit losses as close to zero as possible, HCG still missed consensus 1Q16 earnings expectations....

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HCG.TO: Without Any More “Cookies in the Closet” at CFF Bank, It Appears HCG is On Track to Miss Earnings Yet Again

March 14th, 2016

On some level you have to simply admire the recklessness of HCG’s management team.  After all, over the past three months, the company: 1) reported earnings that fell well short of...

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HCG.TO: Earnings Have Nowhere to Go but Down, Even with “Profits Before Expenses” Accounting HCG’s Core EPS Power...

February 11th, 2016

In case you were wondering what business looks like on the ground, or in this particular case the “air” in Alberta, here’s an important comment from the CEO of Westjet (Canada’s second...

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HCG.TO: OSFI Data Suggests Origination Weakness Continued in 4Q15, EPS Could Miss Consensus, Lowering Target to $16

January 20th, 2016

Well, now we know why Martin Reid abruptly changed HCG’s outlook for loan originations in 4Q15. As a reminder, just five weeks after HCG’s CEO insinuated that the company could generate origination...

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NA.TO/HCG.TO: Four Things I Learned in the Past Week about Canadian Financial Institutions – Rhetoric vs. Reality

December 7th, 2015

We spent much of last week reading, listening, and analyzing the slew of earnings releases, financial supplements, and conference calls from the largest banks across Canada.  Had we known the results and...

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HCG.TO: Purposeful Obfuscation Continues, While Core Earnings Power Evaporates and Allowances Remain at Irresponsible...

November 5th, 2015

A company has finally surpassed the Maple Leafs as the worst run organization in Toronto… The latest development in the mortgage origination fraud scandal at HCG is both remarkable and...

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HCG.TO: OSFI Data Suggests HCG Earnings Could Fall Short for 3Q15; Five Key Questions That Need to Be Answered

October 21st, 2015

A few things have become clear about HCG over the past several months: Management refuses to “clear the air” surrounding the extent of the company’s involvement in and potential exposure to mortgages...

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Canadian Housing: The Demographic Crisis No One Seems to Talk About

October 5th, 2015

Let’s play a little game called “guess the country with a pending demographic crisis”. Here are some hints to start out with, for this country:   1) the median age has increased from 32.9 in 1990 to 40.5 in 2015, 2) the percentage of population...

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HCG.TO: Amidst a Web of Deception Two Facts Are Now Clear: There Was Fraud and HCG Is Drastically Over-Earning,...

July 30th, 2015

“My pain…. Is self chosen At least so the prophet saysI could either burnOr cut off my pride and buy some timeA head full of lies is the weightTied to my waistThe river of deceit pulls downThe...

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HCG.TO: Management Desperately Tries to Spin a Narrative While the Company Increasingly Runs to Stand Still; Let’s...

July 22nd, 2015

“…the hedge funds tend not to do the due diligence. They don’t take the deeper dive and understand.”SAID NO ONE EVER.  Wait a minute, someone actually did say this and very recently.  This...

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Canadian Housing: The Pressure Point – MIC’s and Private Mortgages Have Become the Central Lynchpin Holding Up the...

July 16th, 2015

“The vulnerability associated with household indebtedness remains important and is edging higher, owing to an increase in the level of household debt and the ongoing negative impact on incomes from...

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HCG.TO: The Disturbing Facts Continue to Pile Up Suggesting Far Deeper Issues, the Downside Could Be Bigger Than We...

July 13th, 2015

Was it only two years ago that HCG management triumphantly trumpeted its conquest of short sellers?  Make no mistake the fact pattern surrounding the company over the past six months has been...

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HCG.TO: A Web of Inconsistencies, As We Look Back to the 1990’s

May 8th, 2015

Among Canadian financial services companies Home Capital Group has had a remarkable run of generating strong loan growth, 20%+ ROE, and most importantly for investors, significant shareholder returns.  The stock is up 40 fold over the past 15 years! ...

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NA.TO/HCG.TO/RON.TO: The Canadian Housing Market - Dancing on the Edge of a Razor Blade, Time to Get Short

March 10th, 2015

“Get busy with the facts, No zodiacs or almanacs, No maniacs in polyester slacks, Just the facts…. The small gets big, It’s a rig…. You better run homeboy, A fact’s a fact… Roll the...

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Current Ideas

AYI

SHORT

$129

RON.TO

SHORT

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BIG

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ESI

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SHORT

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25%

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25%

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HCG.TO

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XOXO

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GCA

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HNI

SIG

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