Home Capital Group is a financial institution that specialises in first home mortgages for riskier individuals based in Toronto. Currently, the company has a following of two brokers: HSBC James Capel and Sprott Securities.
Home Capital is able to charge a premium on their mortgages while managing risk by limiting to first home mortgages (should there be a default they can claim the home) to a maximum of 75% of the appraised value of the homes and conducting rigorous background checks. According to a FP article (August 19, 1998, Investing Page 15): "The most common reason for rejection by the big banks is that the applicant is self-employed and deemed too risky under banking guidelines. Self-employment has grown dramatically in Canada in recent years, with some projections hinting at 20% growth in the demographic group over the next five years."
HCG is embarking on an expansion in Western Canada and currently has few competitors. Currently trading at 7.05 p/e trailing earnings, the firm's ROE advanced from 20.6% from 12.3% last year, making it undervalued by several measures.
Its website can be found at homecapital.com
Its subsidiary (where most of the business is conducted) can be found at hslcorp.com |
