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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: This is a comment on Ken's question of this morning regarding LFE. I have analyzed this split share and I thought this might be of benefit to subscribers.: LFE net asset value (NAV) as of February 28 is $ 5.44. The dividends will be discontinued again if NAV goes below $ 5. The portfolio which consists of the four insurance companies Manulife, Sunlife, Greatwest life and Industrial Alliance has to produce a net return of $ 1.825 per unit ($ .625 for the preferred and $ 1.20 for the common) to maintain its dividends. Adding a .75% management fee so the total return for the portfolio has to exceed 11.8 % based on the NAV today. This I think is difficult for a portfolio manager to produce consistently. But if interest rate environment favors life insurance companies this might be achievable. The common share dividends is declared by the manager and to my knowledge the amount is not specific, so it could go up or down. The company uses options to supplement the return and according to their document uses some sort of derivatives which may help increase or (decrease) the value of the unit. Since its IPO, of $25 for both units in 2006 it paid $ 13 ( $ 6.35 for the preferred and $ 6.70 for the common). So yes I consider it risky but the IPO was right before the 2007 crash and lower interest environment which devastated life insurance companies. Although its past is not great, perhaps the future is brighter and it is not without its risk.
Read Answer Asked by Saad on March 18, 2017
Q: In our combined RRIF's, my wife and I have a 10.88% weighting in Financials (TD, BNS, PWF) of which PWF is 2.7%. I would like to buy more lifeco shares and wonder whether I should sell the PWF and put the proceeds into SLF, or just buy SLF to make up about 5% of total portfolios weighting.
Read Answer Asked by John on March 17, 2017
Q: National Bank released a research report on Callidus that gave a private buyout range of $18 to $22, one year ago. Since then revenues and earnings are up. They came out a little while ago saying the value would now be to the top end of that range. The company released a statement in February saying 17 parties were interested and any deal would likely close by the end of June. The stock trades at around $18. Isn't there excellent potential here for a 10-20% trade in just a few months? Thanks.
Read Answer Asked by Michael on March 16, 2017
Q: Due to recent bank stock valuation gains, I am over-weight in financials. My finance sector contains SLF and three banks; TD, BNS, and RY at 6.3%, 5.8% and 5.2% of my portfolio, respectively. I would like to reduce my bank ownership for portfolio balance and I am considering two options; bringing each of the stocks down to 4% each or selling one of the banks, say RY, outright. As background, a full position for me is around 5%. My question, which of the two options would you prefer? And if it is option 2, which bank should I sell? Thanks.
Read Answer Asked by John on March 14, 2017
Q: I'm trying to get my wife's rrsp some international exposure with an ETF that pays a decent dividend for income.Aside from it's small size[ 11.42 M ] but a nice 6.02% div, is there any down side in your view. If so, your alternatives?It currently has XHY and 22 other income and some growth stocks each about equally weighted.
Secondly, a suggested CDN ETF with US large cap/financial exposure that as pays a 3+ % div.
Read Answer Asked by Henry on March 14, 2017
Q: Just comment so please do not deduct credit.Re TD,agreed with 5I that the some $6b drop on 3/10 is excessive,& if TD is found guilty,the fine will likely be not material, plus no move now is the best move.So far this are just allegations,which have to be proven.TD stated that employees must abide by Code of conduct & ethics,i.e. act ethically & place interests of customers first.OSFI is always monitoring the financial institutions.As a retired employee of one of the other big Can.Banks,I can attest that we are closely supervised by management,plus many checks in place to ensure correctness. As a matter of fact,there was a booklet,Code of conduct & ethics on top of my table so that it is visible.We need to review it periodically with the supervisor.
Read Answer Asked by Peter on March 13, 2017
Q: (1) ALL Canadian Banks seem to be teetering now . Should we simply ignore this - trim, or are there still some gains to be had in staying the course ?
(2) Do you feel that a switch to TD from BNS would be a good move with the damage to TD's price ?
(3) I have done so well with Banks and fairly well on Insurance , but my REITS and Financial "Others" ( like CXI ) have reversed ... After the TD over-reaction, should we be expecting a mass exit from the financials on the slightest hint of bad news ?

Thanks for rescuing me from my fear-driven-frequent-trader past .
Read Answer Asked by Thomas on March 12, 2017
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