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Mike MacBainFirst National FinancialFN.TODON'T BUYMay 15, 2014

Are the preferreds a good long term investment? They are in the mortgage origination financing business. It has a speculative triple ‘B’ rating. There is a possibility that the company does not do well. Thinks it will not get called. 5.5% yield. The return on the equity is 7%.

Mike MacBain

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$21.73

Stock price when the opinion was issued

$47.98

As of Oct 23, 2025. Market Open.

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BUY

It’s slowly moved up from $28. The pullback is a natural phenomenon after the pop. Lots of volume. He would buy it here.

HOLD

Alternative mortgage companies have been under pressure lately. Longer term, FN-T has done a good job and is a well-managed company. Management owns a large stake too. Eventually he thinks it could become attractive to other players and could be an acquisition target. It has been a consistent dividend grower. Yield 5.9%

HOLD

They have raised dividends, which signals confidence by management – who also owns the majority of shares. It has a service advantage and get loan turnarounds quickly. Brokers have technological advantages and there is reoccurring capital. Once a mortgage is closed it becomes highly visible and it shows the cash flow path.

COMMENT

Undervalued? Familiar with it but doesn't own it. Anytime you're looking at the financial players especially if they are Canada-centric you want to understand if there is any mortage business and what that book looks like. He is concerned about Canadian household debt now that we see rates start to rise. The discount that you see often in the smaller financial centers in Canada is not that the market is not aware of it or that it's a bargain, it's more to speak to the fact that there is risk in being concentrated on the Canadian economy.

HOLD

Follows it. Well-managed with a decent yield. Very conservative managers. But what happens when the two big shareholders retire or move on? Hold on.

BUY

Buy on the dip or wait? They were seriously looking at this stock, but never bought it. A descending triangle, technically you want to buy on the breakout, and it just recently broke out. So long as its hold above $27-26 it's probably a buy. 6% yield.

PAST TOP PICK

(A Top Pick April 28/16. Down 1%.) At a higher level than Home Capital (HCG-T), but on a par with Bank of Nova Scotia (BNS-T), which is at the top of the pile. The latest quarter was a tiny bit mixed, but that is probably your opportunity to Buy.

COMMENT

This is a different mortgage player. They basically raise their own money and put that into mortgages. They service mortgages, as opposed to using capital as an intermediary to earn a spread. This has been a well-run company. Their software is 2^nd to none. It got caught in the downdraft.

COMMENT

$25 was an old point of resistance. Old resistance becomes new support, and this chart shows it. There is a possibility of this moving up, especially if there is good fundamental news such as a takeover. You might see this rise into the $28 area.

COMMENT

One of the alternative lenders. A great earnings story and a stable company. The fears regarding real estate is what caused the draft down in the stock price, in the latter half of 2016. However, as a dividend generator, it is a pretty stable business. A very tightly controlled company which he likes. Their software is 2^nd to none. This is the kind of name you can own and feel comfortable doing so.

DON'T BUY

A non-traditional, mortgage only bank. Mortgage rule changes last week have caused a pullback. No one knows for sure what the impact of the rule changes will be. She would stay with the big six banks rather than this group. 6.8% yield.

BUY

(Market Call Minute) This is the highest grade of mortgage, non-bank companies in the land. It ranks up there with BNS-T.

TOP PICK

He hopes there will be a cheaper entry point. The company is brilliant because they are the top of their class in mortgage broking. They are above all the other banks. TD-T sends them their external mortgage broking business.

BUY

Stock has performed well and it is very well managed. Would be comfortable adding to your position right now. Very nice dividend. They are set up for a good year coming up.

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Mike MacBainFirst National FinancialFN.TODON'T BUYMay 15, 2014

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