Investment Q&A

Q: <I>December 03, 2015 (asked by Desmond)

Question: I would like your opinion on Saputo, would it be a buy at this time. Thanks for all the great information this year.

5i Research Answer:
Saputo is not overly exciting, but in this market that is not a bad thing. Good earnings growth is expected over the next two years, but it does have a fairly weak record of meeting estimates. Its business is fairly secure and its balance sheet is 'OK'. It is buying back stock, and at 21X earnings is a bit expensive. Over the past 15 years the stock is up nearly 10-fold, and we would be comfortable with a long term position.</I>



I have to mostly disagree with your response to Desmond regarding SAP. Or at least the tone I extracted from your response.

How could SAP not be anything but exciting if a person is looking to make money? Unless they "play" stocks for excitement as in gambling and look only at short term fun.

If SAP has been almost a 10 bagger in 15 years that is a 16.5%/annum return plus a constant growing dividend. An original investment of say, $100,000 would now be approx. $1,000,000. A profit of $900,000! Most people and retail investors would love to have that big a profit both $ wise and % wise as most never produce that in a life time.

I am an investor who does not care if a company meets estimates! So what? Who cares other than the media? Without insider information is not an estimate just that? An estimate, a guess?What matters is the question, "Is the company growing itself, revenue and free cashflow...properly and in a sustainable way?"

I find SAP to be exciting in the short term because I can sleep at night knowing I do not have to monitor it daily/weekly and it should continue to make me money as I sleep with a growing dividend income stream for my future retirement days. Just like CNR, ENB, BNS....

Have a great day.

Stan

Q: John Embry wrote an article for the Daily Buy Sell Advisor (Investors' Digest) yesterday which was quite disturbing. It concerned the massive short selling of gold & silver and the exposure of banks, especially the Deutsche Bank to derivatives. Deutsche Bank is reported to have exposure to derivatives exceeding the entire world's GDP. I have concern for the world's financial system. Can you provide either further insight or guidance?

Q: You commented in early November that you thought this was a good REIT with attractive sustainable dividend yield. Since then it has dropped below $8.50 to within 5% of the 52 week low. Div yield looks even more attractive now. Any change to your view?
Thanks

Q: Hi, I realize you do not cover these, but you may know which one is most suited for a retail investor. Greetings Peter.

Q: Guys is it finally time to give up and dump this? Am down 40%

Thanks
BD

Q: Would BHP be a good alternative to TCK? Or should it also be avoided? BHP's dividend is getting pretty high...do you think it is at risk?
Thanks.

Q: Seems like the European market may finally be showing some signs of life with stimulus on the way. Can you recommend an ETF preferably on the TSX to play the European recovery? Or do you feel that market is not a good bet right now?

Thanks

Q: Hello 5i Team,

Could you please give me your thoughts on Sanofi as a five year hold? I do not presently have any pharma exposure.
Thanks,
Richard

Q: Lloyds of course is going to have direct leverage to the UK/European markets, and a 9X earnings we think its risk is priced in. The government exit implies a 15% discount to buyers, with a bonus share for every 10 bought.
The above was a quote from your response to my LYG.US inquiry. Does this mean if I buy the shares, I will get a ten percent bonus in shares? Haven't heard of this before.
Thanks.

Q: I would like to add international stocks to my portfolio for diversity. My current mix is 90% Canadian stocks and 10% US. I know I should not be so heavily weighted towards Canada therefore I am considering 50% Canada, 30% US and 20% International. Many of my Canadian companies have US and global business. My US exposure is through two low cost ETFs with Vanguard, namely VFV and VUN. Although VFV is comprised of US companies, more than half of those companies have international exposure. Although I am hesitant to buy mutual funds because of their high fees, I note that Mawer funds have lower fees than others plus their performance is much better than passive ETFs. I would appreciate your comments on my goals for diversification, and any other mutual fund companies or actively managed ETFs that you would recommend for international exposure.

Q: I have heard a number of analysts recommend Europe as a place to invest. Can you recommend some European ETFs and do you think the European market looks interesting?

Q: Which seem to be the better investment between Centrica and SSE?

Centrica and SSE were hit hard by Labour opposition plans to regulate the industry further and although Labour lost the election the stocks never fully recovered. This is especially in the case of Centrica. Centrica owns Direct Energy in Alberta as well as British Gas so at first sight would appearto be less impacted by UK politics.

How do you think the UK utilities compare with those in Canada? They seem to be much cheaper on most metrics and the UK has one if the highest growth rates in the G8. Do you think either SSE or Centrica look better value than your favourite Canadian utility?

Q: What are your thoughts on this etf in addition to vxc and vxus for international exposure @ 5% each in my overall portfolio?

Q: Looking for a good ETF that would cover the Japanese market over the coming year. Also interested in emerging market ETF and what your thoughts are for the next 2 years. Thanks and a pleasure to talk to you at the Money Show.

Q: I bought some stock in Luxottica a few years ago and I want to get your advice on whether I should sell or continue to hold.

Q: I am considering stepping into a small position in Tata Motors - do you have any negative (or positive) thoughts on it?
Thanks so much. Your opinion is much appreciated!
Susan

Q: Could I please have your opinion on what to expect from this ETF over next six months to two years?
Thanks again
Larry

Q: Having sold my US financials six months ago, I am now looking at re-entering with Lloyds Bank and KKR. The latter pays a very hefty dividend so I will purchase it in my RRSP. What is your impression of these companies and, in particular, the fact that the UK government is or has disposed of their Lloyds stock.
Thank you.

Q: Hello 5i Can I get your thoughts on this French company Total S.a. I thought this would be good for some international diversification seeing as it seems to have operations worldwide. It seems to have a low cost of operation and low cost of acquisition, but I am not sure how to read it's debt levels. It's had a nice little bump up since end of Aug. Your views are greatly appreciated.

Q: My advisor recommended Fidelity Northstar Fund for some international exposure in my RSP account. Although it does not distribute a dividend, it has shown good growth for 5 (17.19%) and 10 (8.55%) years. I am not sure if you have to hold it for a minimum period of time. Your thoughts please. I am not sure if the net costs to me are worthy of holding this fund in my RSP and I also wonder if you advise foreign content in a CDN RSP