Canadian Imperial Bank of Commerce (USA) (CM)

Ah yes, the good old Canadian Imperial Bank of Commerce (CM). I've been waiting for an opportunity to buy this business!

The share price fell in mid-December, 2007 when the bank disclosed it was exposed to a potential loss of $1.3 billion (after taxes) as a result of the US subprime mortgage crisis. Everybody in the Great White North was mad at the bank because Canadian banks were not supposed to have any exposure to the nasty US subprime mortgage crises. Oh well, that gives us a chance to buy a great bank at a great price.

Let's put this minor setback into perspective. CM has net earnings of about $2 billion, so even if they have to write off the $1.3 billion, they will still be in strong financial shape. Also, remember back in 2006 when CM settled with Enron shareholders to the tune of $2.4 billion. The bank went on from that unfortunate incident and the share price was hardly affected. Onwards and upwards I always say!

Now for the good news. ValueLine estimates CM's book value will grow at an average rate of 11.5% over the next 5 years. If we buy at a price per share of $68 (2 times book value) that means our invested capital should grow at about 5.7% per year. In addition, with a dividend of $3.11 in 2007 , you get a yield of 4.6% on your shares. So if I buy and hold these shares (and ignor the erratic Mr. Market for the next 5 years) I should get a return of about 10% on my investment, provided the P/B ratio remains at about 2.0. If things go really well for CM over the next 5 years and the P/B value increases to 2.5 (entirely possible based on CM's historic P/B ratio); then I could be looking at a return of 20% per year.

Finally, if the $US dollar continues to fall against the Canadian dollar, you will do even better.

So I'm betting CM will put this subprime mortage business behind it and move on to bigger and better things. Even if the Price/Book does not rise to its historic range of around 2.5 or 3.0 over the next 5 years, I will be happy to hold my shares and watch as my investment grows by about 10 percent per year.

Dirt cheap stock with plenty of cash. Canadian business that has (if the worst was to happen) a Government to bale it out.

BUT IT WON'T NEED IT!

With 24,402M in the Gross Profit (great growth over the last 2 years) it IS the player in its industry (83% rule maker). Fool ratio is 0.1 (n.b. the lower the better, zero being an ideal totally undervalued stock).

Need more convincing? How about Net Margin 65%, and Gross Margin Growth 16%.

Last call on this stock saw a drop of 75c or there abouts. There is no 'REAL' reason for this fall, even given the financial market whoas. I'm buying this stock and plenty on Monday!

- 01/27/2008

I feel the banks are turning up soon. Don't want to try to time it. There's been good support strength at 65, so I don't see much downside at this point. Well, let's say I see more upside in the years ahead then I do in the two months ahead, so we'll take the long term view and not miss the bounce to come trying to save a couple of bucks.

As far as CIBC being the worst of the Canadian banks in the subprime mess..... yes, it is true. However, watch the market trend on the positive days when banks do well in Canada, it's actually CIBC that moves the fastest higher. All will be forgiven when the market turns. Just like it was all forgiven for CIBC when they messed up on the Enron story.

In the short-term, fair pricing still requires a 20% stock price increase. Within 3-5 years, we'll be back nearing $100/stock though.

Great canadian bank, just bad times, so it will turn around eventually, as i believe it can weather the storm

good canadian bank

President Bush signs historic financial rescue plan into law - October 3/2008

money.cnn.com/2008/10/03/news/economy/house_friday_bailout/index.htm?postversion=2008100309

The Canadian Federal Government introduced TFSA(Tax-Free Savings Account) in the 2008 budget. As soon as the majority of the citizens fully understands the benefits of TFSA, Canadian Imperial Bank of Coomerce will accommodate their needs.

This stock is trading below book value and also is trading at a very low price to operating cash flow ration..It also has a very generous 5% yield.

Canadian bank, protected market, good economic growth, and pays decent dividend. look for stock split this year.

think it will pull back for a better entry, but pick now to get it rated and be able to track it

Still a good bank with good prospects. P/E seems low - some apparently feel a little skeptical about its prospects. I think it should keep ticking along just like the rest of the Canadian 'Big Five'

Low present price,
Past performance of risk taking/winning

Market Capitalization: $25,396,968,000 $66.72

Book Value: $110,506,000,000 $285.08

Current-Asset Value: $99,326,000,000 $256.24

Cash-Asset Value: $1,457,000,000 $3.76

Liquidating Value: $10,532,956,400 $27.17

Its Intrinsic Value is $114.83, this stock is undervalued, its assets show that its worth more than what the market has priced it at. Sooner or later this stock will flurish and hit over its 100 High in january.

It's overpriced and poorly positioned. There will be a small rebound but it's growth will not exceed the market.

CIBC has by far the worst exposure of the Canadian banks in the subprime mess due to generally bad management, especially compared with the other Canadian banks.

However, the current price is crazy market driven jitters, compared with their financials and status. There is no doubt this bank will recover its price, maybe not to the $>100 highs in the next year, but maybe in the next 2-5 years.

ALSO: Look out for Bank of Montreal (BMO) ... they've recently revealed their 'real' exposure and are dipping ... similar story.

supercycle

canadian bank, price target above $70 sounds like a deal to me

this stock has taken it's beating with subprime mortgages, did it's write downs - now is time to buy, it is on it's way back up