If Bank of Nova Scotia Is Not a Buy, Is it a Sell?

As the market recovers from the lows of the start of the year, it’s been difficult to find quality businesses on sale. At about $63, Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is about 12% off from its normal multiple, which is a decent discount for a top business. But this discount is not as attractive as when the bank was at the low $50 to mid-$50 level.

If the interest rate remains low and the Canadian economy continues to be sluggish, the banks in general are going to grow at a slower pace than before. And that’s why they are selling at slight discounts from historical levels.

If an investor owns shares in Bank of Nova Scotia and doesn’t think it’s a buy, does that mean it’s an automatic sell? In fact, a friend of mine recently sold close to 90% of his holdings in his bank position because he believes the market is going to crash soon–either this year or next year...


Source: The Motley Fool