Home Capital CEO Soloway Sees No Canada Housing Bubble
“Despite a softening housing market in Canada, we do not believe there is a bubble,” Gerald Soloway, chief executive officer of Home Capital, said at the company’s annual meeting in Toronto today. “While the volume of home sales may have declined about 15 percent across Canada, prices have remained very stable.”
Home Capital rose 2.7 percent to C$51.10 at the 4:00 p.m. market close in Toronto. The company’s shares have declined 14 percent this year as Canada’s housing market cooled. Home resale prices in Canada rose in April at the slowest pace since 2009.
Short interest on Home Capital stock reached a peak on May 14, with 23 percent of the stock shorted, data compiled by London-based Markit show. Short sellers profit from price declines by selling borrowed securities and replacing them with stock bought at cheaper levels.
Steve Eisman, the Emrys Partners LP founder who rose to fame betting against U.S. subprime mortgages, said he was shorting Home Capital stock at the Ira Sohn conference in New York on May 8 as he forecast a housing slowdown.
Soloway said he sees solid growth for the company in 2013 and that it will increase its presence in urban markets.
Fred Westra, a Montreal-based analyst at Industrial Alliance Securities, said today Home Capital was a top pick and raised his price target to C$79 from C$75,
The stock decline had been overdone, Westra said, forecasting higher loan fees and securitized lending.
To contact the reporter on this story: Jacqueline Thorpe in Toronto at firstname.lastname@example.org
To contact the editor responsible for this story: David Scanlan at email@example.com