Investment Q&A

Q: Peter and Team,

There is a bond in the "high yield" category available through my broker for Vermillion Energy. The Maturity is Feb. 2016 and it is showing a coupon of 6.5% and an ask price of $101.850. I like the short duration and I think the yield looks good. Any thoughts and buying or not buying this bond? My aim is simply to buy the bond and hold to maturity to collect the yield and then get my principal returned.

Marc

Q: IPL raised there dividends on Nov. 6/14. What is your view on this company looking ahead 2 or 3 years? Is another pipeline company a better investment?

Q: Peter can you comment on the current price of temple reit -seems overdone to me -Kim

Q: May I have your assessment of the latest quarterly results
of Logistec (LGT/B).
Thanks, Tim.

Q: Hello Peter and team,

The carnage in the energy sector continues, so it is time to see where my non-registered portfolio really is on its energy weighting. Please help me understand if I am really overweight in energy. I know it is a personal choice what percentage of a portfolio is exposed to energy, and the numbers being tossed around are 10% to 15% being ideal for most investors.

If I use the TMX sector categorization then I have 33% of my portfolio in energy. As of the close on Nov 13th the stocks are:

PPL (+52%)
IPL (+37%)
ENB (+29%)
WCP (+22%)
SCL (-3.5%)
CPG (-7.6%)
SGY (-10%)
TOU (-18%)

But your sector categorization is a little different. You consider PPL/IPL/ENB as utilities, and SCL seems to be a basic material. If you slice it that way my energy component is 16%, utilities 14%, and basic material at 2.8%

When you say a weighting in energy of around 10% to 15% is ideal, would you include the pipelines, and material stocks like SCL in that weighting?

Which one(s) would you trim or eliminate to reduce the energy weighting?


Paul J.

Q: What do you think of dr results. thanks Also lw leisure world reported today could you comment on their results too thanks

Q: 1:42 PM 11/13/2014

Hello Peter :
I currently have a 17.5% position in precious metal stocks [FNV 10.2%, G 3.9%, SLW 3.02%, SSL 0.4%]. This is partly due to an inheritance about 2 years ago whereby the shares were transferred in to our account at the very high ACBs prevailing at the time. We sold a good portion of these stocks at that time but still need to reduce.

We choose to keep Franco Nevada in it's entirety as our only gold holding as it is a stable powerful, growing, well-financed company with low overheads and an acceptable dividend, but we do plan to sell G, SLW, and SSL even though these are very good companies. These 3 stocks are down 31%, 29% and 39% respectively from their ACBs.

The plan is to invest the proceeds into dividend-growing high quality stocks as we need the dividend income along with reasonable growth. We could add to our already existing positions in : Corby[CSW.A 2.1%], A&W[AW.UN 2.3%], Emera[EMA 2.2%], Telus[T 1.8%].

Or we could initiate new positions in two or more of Enercare [ECI], Chartwell [CSH.UN], BMO REITs [ZRE], Cervus [CVL], Alaris [AD], or AgGrowth [AFN], all with dividends in the 4-5% range.

I believe [hope] that gold and silver prices will rebound over the next few months or year [or then again maybe they won't] and the issue is whether to sell them now at a low or whether to do nothing and wait until the losses are greatly reduced. We cannot use the tax loss now and would have to carry it forward for future years. So the question now is whether the gold stocks will rise faster in price than the stocks we wish to buy?

What would be your strategy - switch now or wait - and which of the 10 stocks listed above would be the best buys now or in a year or so, and why?

Your opinion always greatly appreciated...... Paul K.

Q: I’ve been trimming my holdings of JE and today they released their numbers. Just Energy Group loses $135.15-million in Q2 2015. The report says the loss, “represents the mark to market of future commodity supply acquired to cover future customer demand”.

The market seemed to like the report as their other numbers seemed positive. Should the current loss be ignored or is this risk likely to continue with energy costs dropping?

I’m aware that you prefer SGY for income and growth. Would you continue to recommend trimming JE and replacing it with SGY – staying in the energy sector?

Q: Hi Peter,

Could you pls comment on veresen, is it long term hold for 10 yrs they have the ruby lng project and our they in the same
business as lng cheniere energy with this acquisition

Q: These 4 telecommunication stocks represent 13% of my income portfolio: BCE (4%), MBT (2%), RCI.B (3%), T (4%).
I know you aren't a big fan of RCI.B, but I emotionally feel like I deserve to get something back from Rogers in the form of dividends since I fall out of my chair every month when I see what my household spends with them (cell phones,internet,cable..etc). Wrong approach?

Am I too overweight in this sector? Current sector weighting:

Consumer 3%
Banks 19%
Insurance 11%
Utilities 7%
Telecom 13%
Precious Metals 5%
Energy 15%
REIT 13%
Industrial 10%
XEI ETF 4%

I love this Q&A portion of your site. Thanks

Carlo

Q: any thoughts on earnings

Q: hello 5i team

At the end of Sept you mentioned EMA looked better than Fortis offering a better yield plus, it was cheaper... price at the time $35.10.

Today I read an article about EMA being heralded along side of Enbridge as two of the better utility stocks that offer a good yield and realistic equity growth opportunity. Plus, it looks like EMA has established (according to the author) an annual dividend growth target of 6% for the next 5 years.

Right now I have a portfolio position of 4.6% in ENB and this is my only utility.

At the current price ($37.40) what is your opinion (sell/buy/hold) on EMA and do you still consider it "cheap" based on current metrics.

As always, thank you so much for all you do... am sure i would be much poorer without you.

Gord

Q: What do you think about Capital Powers current cash flow position, particularly its negative Free Cash Flow and negative Net Free Cash Flow?


Cash Flow From Ops. 426 375 401 415
Capex – Maintenance 943 225 112 112
Free Cash Flow (508) 77 151 157
Capex – Acquisitions (595) (9) 0 0
Cash Flow From Financing (240) (70) (150) 22
Div./Distr. To Common 62 83 138 146
Net Free Cash Flow (153) 17 1 179

Q: I am an income investor seeking some growth. Given a choice between GEI and Key, which one would you choose?

Q: Could I please get your view on Gibson's latest quarter? It appears to be good but stock price continues to fall.

Q: Did you listen to PPL's conference call last week on their results and if so, your thoughts. TD Securities Nov 6 raised the target price to $57.
As always, thanks

Q: I Looking at a 5yr chart of CBO & CLF which show they have declined in value by about 6% over that period. Bonds are supposed to go up during periods of declining interest rates. trying to get an intuitive handle on this I was led into the swamp of Duration & rolling down the yield curve, neither of which is intuitive. I concluded that CBO.. managers are exploiting volatility to enhance the yield/Cap gain and paying out a mixture of of coupons & trading gains. This would mean that the decline or growth in NPV of CBO.. is not a metric that can be easily interpreted. Could the NPV rise in a slowly rising interest rate? Can you provide an intuitive way to understand CBO..s varying value

I appreciate your answers every day

Ernie

Q: What is your opinion on the latest news that Veresen is seeking jv with Japanese interests on the Jordan Cove project and does this add more value to the stock?

Q: Dear Amazing Team:
I would appreciate a current update on your assessment of Capstone Infrastructure. Dividend safe? Thanks so much.

Q: I bought the following for income in the 3 weeks. Please suggest 5 or 6 more income stocks. Thanks.....