Canadian mortgage lender Home Capital was given a boost Monday after Scotiabank’s economists upgraded the firm to a ‘buy’ rating and said that US investors were overreacting. The upgrade comes amid a flurry of ‘shorting’ of Home Capital stock by (mainly) American investors following the lender’s news release last week showing a lower rate of mortgage originations after it severed ties with some brokers. Scotia Capital analyst Phil Hardie told The Financial Post: “While the near-term growth and investment thesis is challenged, with HCG now trading near trough multiples we believe the stock is oversold and offers an attractive reward.” Home Capital stock gained around 2.13 per cent after the upgrade and releases full financial results at the end of the month.
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