Bank of Montreal (Symbol-BMO)

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patriot1
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Post by patriot1 »

epson600 wrote:
patriot1 wrote: If a share dividend is taxed the same as a cash dividend, it certainly isn't neutral for anyone with taxable holdings.
If it is taxed the same as cash dividends, then by definition it is neutral from a tax liability viewpoint.
I meant neutral compared to simply not paying a dividend.

A stock split is neutral compared to no split.
Last edited by patriot1 on 16 Mar 2008 05:26, edited 1 time in total.
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Post by Small Investor Activist »

"The Street is betting that BMO will cut the dividend," said David Rea, chairman of Davis-Rea. Globe and Mail
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Post by Subby »

It appears as though BMO has avoided a bullet this time.

BMO announced late yesterday that it has reached a deal that will transform the ABCP trusts in a similar fashion to the restructuring that's being attempted in the rest of the $32-billion third-party ABCP sector.

DBRS structured finance analyst James Feehely said this is "another positive step in the restructuring of the third-party ABCP market."

http://www.reportonbusiness.com/servlet ... iness/home
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Post by sweedy »

Subby wrote:It appears as though BMO has avoided a bullet this time.

BMO announced late yesterday that it has reached a deal that will transform the ABCP trusts in a similar fashion to the restructuring that's being attempted in the rest of the $32-billion third-party ABCP sector.

DBRS structured finance analyst James Feehely said this is "another positive step in the restructuring of the third-party ABCP market."

http://www.reportonbusiness.com/servlet ... iness/home
Yes. Maybe tomorrow the price will rise above my latest purchase price.
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Post by scampbell »

Closing the barn door after the horse has left???

Risk manager joins BMO board
TARA PERKINS
Globe and Mail Update
March 28, 2008 at 8:42 AM EDT
Bank of Montreal said Friday that it has appointed Don Wilson III, a former JP Morgan Chase & Co. chief risk officer, to its board.
The bank's chairman, David Galloway, told investors at the bank's annual meeting earlier this month that BMO would look to strengthen its board with people who had a strong expertise in risk management.
Mr. Wilson retired from JP Morgan Chase & Co. in 2006, having been responsible for credit, equity, market and operational risk globally, BMO said Friday.
“We are pleased to welcome Don to the board of directors,” Mr. Galloway stated. “He is a superbly qualified individual, who brings a broad competence in financial markets and all aspects of risk management.
“I am confident that Don's wealth of experience in financial institutions globally will serve the bank well.”
Bank of Montreal's recent first quarter earnings were hurt by nearly half a billion dollars in writedowns relating to the liquidity crunch. Last year, natural gas trading problems cost the bank more than $800-million.
Mr. Galloway told investors at the bank's annual meeting that the board had overseen a complete review of risk management systems and procedures at the bank.
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Post by morleymarkle »

Just issued 250 million in preferred shares at 5.2% (plus a possible 50 million more?), while the common is yielding 6.2%.

http://www.globeinvestor.com/servlet/st ... 9/GIStory/

Dumb question, but why would anyone buy the preferreds, unless they have a very bearish view of BMO going forwards over the next 5 years or so, or they believe the current common dividend may be at risk.
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Post by AltaRed »

morleymarkle wrote:Dumb question, but why would anyone buy the preferreds, unless they have a very bearish view of BMO going forwards over the next 5 years or so, or they believe the current common dividend may be at risk.
I think you answered your own question.
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Post by kcowan »

morleymarkle wrote:Just issued 250 million in preferred shares at 5.2% (plus a possible 50 million more?), while the common is yielding 6.2%.

http://www.globeinvestor.com/servlet/st ... 9/GIStory/

Dumb question, but why would anyone buy the preferreds, unless they have a very bearish view of BMO going forwards over the next 5 years or so, or they believe the current common dividend may be at risk.
Another question. Why would anybody purchase the IPO when the can wait and get them on sale?
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Post by beluga »

I'm thinking about averaging down on BMO. Anyone know how the recent meltdowns affect the Sitka and Apex restructuring?
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Post by brad911 »

No surprising write-downs at BMO.
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Post by Shakespeare »

It's always nice when the end of the world isn't. :wink:
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Post by scomac »

Not only that, but a very solid quarter. What seems most impressive at first blush is the strength of regulatory capital measures and the progress the bank has made in delevering. It just goes to show you that a solid DRiP benefits more than just the shareholders. It's also a very effective method to build a balance sheet.
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
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Post by Blonde Bond »

And the dividend is safe. This is one of my biggest holdings - I'm relieved (and kinda impressed) that BMO could post decent numbers in such a chaotic market.
Am I just being naive ?
Could there be more to it :?:
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Post by mpav »

Well positioned, and consistent....two weeks ago I was thinking this and possibly CM would be the ugly ones that would through a surprize in the mix (equity issue etc.).

The market response at this point is a bit muted....as there is good news in a few spots (retail sales numbers, new fed program etc.), it is nice to see the market actually relax and take things in stride.
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Post by marty123 »

Blonde Bond wrote: Am I just being naive ?
Could there be more to it :?:
BMO credited the change of accounting rules allowing them to decide how much loss they wanted us to believe they had to not value their commercial paper at mark-to-market. I'm still surprised at how much better their results look, despite the acknowledged $183 million loss they avoided. It's not a "technical" loss :twisted:

On a more personal note, I decided to review my investment portfolio, and if I value all my securities at book value, I'm flush YTD :-)
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Post by mpav »

I think the rule that the banks use (and I am not an accountant so bow to their expertise), but banks can transfer securities from the accounting classifcation 'held for trading' which they mark, and those 'held for sale' which they don't have to mark.

As said, that's my understanding and it is a newer rule so not sure if I understood correctly.

If it is true, and it would obviously have less mark to market type of loss, but I assume if it is the asset marked for sale category you have to sell anyway and book the loss.
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Post by Blonde Bond »

Thanks mpav and marty123 :)
mpav wrote:I think the rule that the banks use (and I am not an accountant so bow to their expertise), but banks can transfer securities from the accounting classifcation 'held for trading' which they mark, and those 'held for sale' which they don't have to mark.

As said, that's my understanding and it is a newer rule so not sure if I understood correctly.

If it is true, and it would obviously have less mark to market type of loss, but I assume if it is the asset marked for sale category you have to sell anyway and book the loss.
According to this Reuters article, the only big Canadian bank NOT using this accounting 'flexibility' is BNS. I guess that means BNS earnings will be the most accurate this quarter.

http://www.reuters.com/article/newIssue ... dChannel=0
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Post by creep »

BMO's high yeild should set of warning bells.

At a payout ratio of 72% should we be starting to get worried? Hmmm....
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Post by Bylo Selhi »

BMO raising $1-billion
Bank of Montreal [BMO-T]is issuing $1-billion in common shares, making it the third big bank to issue equity recently as financial institutions seek to strengthen their capital levels.

BMO said Monday it will issue 33,340,000 shares at $30 apiece in an offering that's expected to close Dec. 24.
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Post by mpav »

Seems everyone is tapping the market....what happens when the last one comes to party and has found there is no more food (or alcohol)?

All the bank issues are getting fully placed, but if we keep going like this, eventually they will either run out of investors, or have to be more international.
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Post by AltaRed »

mpav wrote:All the bank issues are getting fully placed, but if we keep going like this, eventually they will either run out of investors, or have to be more international.
When they keep giving them away at a discount to the market, I guess there will always be takers.
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Post by Locke »

at that offering implies a yield of 9.33%. As juicy as that sounds, it's scary to me.

Though their dividend history is impressive, there's always a first for everything especially in this unprecendented market.

Mr. Market knows something and I'm not sure what. The other thing I noticed that is aside from TD most other issuers have fallen below the issue price after time.
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Post by skepticus »

Locke wrote:at that offering implies a yield of 9.33%. As juicy as that sounds, it's scary to me.

Though their dividend history is impressive, there's always a first for everything especially in this unprecendented market.

Mr. Market knows something and I'm not sure what.
"The stock market is all about Insiders taking advantage of Outsiders". I wish I could remember where I read that. But there's a lot of truth to it--and I wonder if that's what is happening here. The Insiders being BMO, in this case.
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Post by patriot1 »

The insider cannot be the company itself, because the company is the shareholders.
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Post by scomac »

Locke wrote:at that offering implies a yield of 9.33%. As juicy as that sounds, it's scary to me.

Though their dividend history is impressive, there's always a first for everything especially in this unprecendented market.
Something is up here. The cost of capital on this equity issue is way higher than the competition and based on their recently released numbers, not even really necessary...supposedly. I know that if I still owned it, I would be concerned. This seems desperate to me. Why would you raise equity at book value when you have very little in the way of goodwill and intangibles on the balance sheet?
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