In the third quarter of 2015, Signature Select Canadian Fund (Trades, Portfolio) purchased 85,500 shares of Home Capital Group Inc. (HCG, Financial).
Signature Select Canadian Fund (Trades, Portfolio) was founded in May 1998 with the objective to seek capital appreciation over the long-term coupled with dividend income. The fund invests primarily in common shares and convertible securities of Canadian companies and preferred shares that pay regular income.
The fund has a team of over 30 investment professionals and is led by CIO Eric Bushell, who was named Morningstar’s Fund Manager of the Decade in 2010.
Home Capital Group operates through its subsidiary, Home Trust Company. Home Trust is a federally regulated trust company that offers deposit, mortgage lending, retail credit and credit card issuing services. The company is licenced to conduct business across Canada, and they have offices across six provinces nationwide.
Home Capital Group has a market cap of $1.75 billion, a P/E ratio of 5.65, an enterprise value of $1.29 billion and a dividend yield of 2.64%.
Home Capital Group has a 8/10 profitability and growth rate according to GuruFocus. The company's operating margin is 69.25%, which ranks them above 96% of the companies in the global specialty finance industry. Home Capital Group’s revenue share is also showing predictable revenue earnings and growth, which is also a good sign. The company is also trading well below its intrinsic value, making it an even more attractive holding.
Below is a Peter Lynch chart for Home Capital Group Inc.
The earnings line is more than double the current price, which is another good sign for this stock.
I really like this company because they have many ways to monetize their services via mortgage lending, retail credit and credit card issuing services. People are always going to need a roof over their head, and Home Capital Group is in the business of lending out loans with interest. The company also has advantages including experience, financial strength, earnings power, and growth. The company is also trading well below their actual intrinsic value and has a 4.5-star predictability rating according to GuruFocus.
This is a great company to invest in for the future.
Disclaimer: Author does not currently own any shares in this holding.
Cheers to your investment success.
