Investment Q&A

Q: Can you explain the e recent weakness in SLF

Q: i bought efn because it was financial operating in a different niche than the banks or lifeco's. i'm looking to add some more and bring it up to 1/2 position in my portfolio. add now or wait for the split? if wait for the split, stick to the leasing business?

Q: X has had a run up recently. Still, I see a forward P/E approx. 13 times. 1.1 price to book and under 12 price to cash.
I do love to compund "toll road" dividends. BUT, is X truly a toll road these days? Some comment about competion in the space, but who exactly are the competitors? I don't want to buy the stock only to see it become "Uberized" by new technology in a short or medium term.
I am looking for a long term hold and hoping dividend increases are on the way. Set it and forget it.
Your thoughts please. Keep up the great work and many thanks.

Cheers
John

Q: I recently added a small position in CHW primarily for the nice yield and low PE valuation and low payout ratio. I also like their US focus. The stock price is up nicely since I added and I was thinking of adding to it or starting a position in CBL. I am a long term investor (10+ years time horizon). Would you have a preference of one over the other?
Thanks

Q: Hi- the banks all seem to have done well, partially because loan loss provisions have been reduced. Is that a discretionary situation...in other words, can earnings be boosted by lowering provisions? How does that work?
How does it relate to Tier 1 capital? And what are the banks' Tier 1 Capitals now?
Thanks

Q: Hi 5i,
I am young and have time to hold stocks long term. I own some Canadian bank (bns) as well as some broad etfs (and other various non-financial stocks).

Is there value or reason to own a company like Sunlife or Manulife (or similar, please recommend if you know of something better). Or would it be better to own a second Canadian bank? Or would it be best to add the extra money to my BNS position?

Thanks

Q: Callidus Capital has been increasing the share price amount (now at 16.50) and extending the duration of its buyback offering for quite a time now. I am trying to figure out what the end game in this is. Does this mean they will go private and are trying to clear out stock at lower valuations or are they propping up the price, building awareness, etc. so they do not have to go private? Perhaps they are testing the market perception of a fair share price in a beneficial way to the company? I purchased a full position at $20ish range and I held on. I enjoy the dividend and feel the company has strong potential. I hope your greater experience in the markets can educate me on this one. Thanks

Q: Hi 5i team :

would you buy National at this point (46.19) ?, the financial report issued today "looks" OK, but the price drop is concerning. Also many analysts have it as a "hold", why ?. Would you prefer CIBC instead ?, yields and forwards P/E are very similar for both according to Thomson Reuters.

thanks !

Q: I am wondering what the payout ratio is for the above company. Also, how is the valuation at present compared to other financing companies? Thanks.

Q: Can you give me the names of one good/liquid US and one good/liquid canadian ETF - primarily holding banks or other entities that will go up when interest rates go up?

Q: I believe you prefer SLF, but what do you make of MFC at these levels. Would you comment on their fundamentals, Asian potential, wealth management business and technical signals. Would they be a decent buy at these prices ,speculating on an interest rate hike. I've discovered that I am a patient investor and tend to hold on for better or worse.

Q: peter what do you of lloyd of london

Q: Hi,

I would like your opinion on whether holding the banks are sufficient for financial exposure. I am debating selling some of the Canadian banks and go into a life insurer like Sun Life. Do you feel its warranted to own both a bank and lifeco or do I have enough exposure holding just the banks. Thanks.

Q: Hi Peter Comments on bns
regards Stan

Q: Hi guys, does Fairfax 'crash' hedges get reflected in price (either due to fundamentals or sentiment) in your view? I know its only a portion of their vast holdings, but I always get nervous when FFH is up like today's 3% move. Do you also view the stock as a bet against the market short-term due to their hedge book?

Q: would you move from Canadian Western to Home Capital?? Thanks Jim

Q: Recently the media was awash with implied heavy concerns around the supposed losses the CDN. banks would be reporting this week and next. They said so while trying to impress an implied authority. The media even went so far as to create a reason.

I had to try and stop laughing once again at the business media in general, so as to be able to type this post, as it once again showed that it basically is a comedy show and of little value to investors. At least when it comes to predictions.

I often wonder if the media have to work and prove their metal at SNL 1st (Saturday Night Live).

So far all of the banks that have reported have provided growing if not all time high revenues, earning, profits....

Stan

Q: I read Element Financials conference call transcript for Q2 and this what I got from it.

They have been winding down 2 portions of their businesses which intern has,
1) Reduced originations and lowered EPS
2) Returned capital to make them M&A ready
3) Short term from "30,000 ft view" makes them look like they are falling apart
4) But, closing these business books will allow them to redeploy the capital to much higher ROE investments to grow earnings faster

The split of the company has put some of it's business activity on hold,
1) M&A has been stopped until the split so no big growth in Q2 and Q3
2) 3 immediate acquisition targets will be pursued when split happens
3) New funds will be launched for income growth and to free up capital for M&A
4) Expect some major accretive acquisition(s) to happen and possible surprise earnings either in Q4 or Q1.

So in conclusion they are setting themselves up for greater growth and shareholder value. To do this they have to sacrifice income in the short term to strengthen their capital, plus delay growth until the split occurs.

Is my simplified summary similar to 5i's consensus on this company?

Thanks, Shane

Q: I've collected a 5% dividend from Genworth for 2 years now. The stock has rallied to 35 recently, which is a nice move relative to HomeCapital (considering it's also in the canadian mortgage insurance business). It is now sitting below a hard level of resistance. I'm considering switching to GoEasy, which yesterday, finally broke above $20/share (was stuck below for a long time). It seems that there is a lot more momentum in GSY right now. Also, Telfser, who's fund performed the best last year, owns it and recommends it. The dividend isn't as good (2.6%) but I'm looking for (some) capital appreciation. Would you be ok with it?

Q: 5i team, can you comment on latest Special Meeting (Tues Sept 20, 2016 9 am EDT), RE: Element Arrangement Resolution; ECN Capital Equity Plans Resolution; and Share Issuance Resolution? thank you