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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Good morning team, I know you like CCL/B, but would you pls. comment on TD's theory of removing their position from their model portfolio...

Materials
We are removing our position in CCL Industries Inc. (CCL.B-T, portfolio
weight 2.5%), given what we view to be a poor sector backdrop and a high quantitative risk outlook.
Given CCL's consumer product customer base, we view the removal of CCL as part of our strategic rotation to reduce exposure to consumer stocks. We view the weak pricing environment, as seen through the low consumer price indices and the very poor performance of the U.S. consumer staples sector,
as a potential negative trend for CCL. Our concern is that the weak pricing and potentially higher costs in consumer stocks could be passed down onto packaging and related companies. Margin pressures in consumer-products related sectors, such as auto and auto parts, is a common theme late in the cycle.
Quantitatively, we are seeing a modest deceleration in CCL's trailing and forward earnings momentum. Following its recent quarter, the 2017 consensus estimate was lowered slightly more than its 2018 consensus estimate. As a result, CCL has what we would consider to be high 2018 year-over-year earnings growth expectations of 15%. Combined with a high multiple of 21x 2018 consensus earnings, we believe that CCL is at risk if 2018 consensus earnings are lowered.
Following its recent price recovery and what could be technically viewed as a "double-top" formation, we are willing to take profits at this time.

And Thank You!! for the upgrade on your website.

Read Answer Asked by Silvia on November 06, 2017
Q: Love the new website format and content. Please rank ccl,b and sj based on long term growth and current valuation. I only have room for one in my tfsa. Thanks
Read Answer Asked by Richard on November 06, 2017
Q: In your recent response to Margita you recommended holding Enbridge for the dividend. As a retiree I purchased 1k shares of ENB not only for the dividend income but also the projected dividend growth of 10-12%. What are your thoughts on the later? Is there anything in the latest financials or management comments (or lack thereof) that would cause you to re-consider ENB for the balanced portfolio.
Many thanks
Mike
Read Answer Asked by michael on November 06, 2017
Q: Hi 5i team,
first, really like the new website, especially the company section.

I've been thinking of adding GC to my holdings. They are to report in early November, would you recommend I wait for the results or is it OK to add before given the recent pullback?

Also, in your research report you mention that you would like it if they would start paying a dividend. Has management ever discussed this in the past during conference calls or otherwise?

Thanks for the great service.
Daniel
Read Answer Asked by Daniel on November 06, 2017
Q: I currently hold TCN in my TFSA but am considering a switch to SIS. I understand these are two totally different companies but am looking for a little more torque to the upside with SIS. Your thoughts ?

Ken
Read Answer Asked by Ken on November 03, 2017
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