Blue Chip Stocks – Profit from the plunge

Article Excerpt

BANK OF NOVA SCOTIA $44 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 990.0 million; Market cap: $43.6 billion; SI Rating: Above average) is taking advantage of the credit crisis to expand its wealth management operations. Sun Life Financial Inc. wants more flexibility to pursue acquisitions, so it has agreed to sell its 37% stake in CI Financial Income Fund (Toronto symbol CIX.UN) to Bank of Nova Scotia. CI Financial is Canada’s third-largest mutual fund company. Following the purchase, Bank of Nova Scotia will own 37.6% of CI Financial. The $2.3 billion purchase price is equal to 2.3 times the $1.0 billion or $0.98 a share that Bank of Nova Scotia earned in the three months ended July 31, 2008. The deal should be a good one for Bank of Nova Scotia. It’s paying $22 a unit for CI. That’s more than CI’s current price of $16.80, but 33% below its record high of $32.69 in August, 2006. As one…