Investment Q&A

Q: Hi, What do you think of BNS buying Sears Canada credit card portfolio from JPMorgan? Would buying in a TFSA be best as the dividends won't be taxed?
Thank you!

Q: Hi Peter and Team,

Could you please comment on National Bank? Is it good buy at current price compare to other candian banks?

Thanks

Q: What are your thoughts on Genworth ?

Q: May I have you opinion on preferred shares? Specifically I would like you opinion of
Royal Bank of Canada 3.6% Non-Cum. 5-Year Rate Reset First Pref., Series BD

Call/Reset Date: 24-May-2020
Call Price: $25.00
Terms of Reset: 5yr GoC Yld + 2.74%
Close Price (13-Oct-15): $18.46

Since this is considered to be Non-Viability Contingent Capital, I believe there may be a good chance that this will be called. At the current price, would it be worth buying for the fixed income.

Thank-you

Q: Noticed a number of articles recently on a suggested threat to traditional banking business from emerging technologies and new 'fintech' startups, including an article in today's online Globe Investor. Any thoughts on this? Do you think the big Canadian banks have the ability to respond to the possible scenario? Thanks.

Q: The price of NA has fallen more than other banks and now the dividend yield at current price is close to 5%. Is there a concern about this bank or is this a good buying opportunity?

Q: Is MFC in the buy range?

Q: Not sure if this was sent earlier.Add some comments to 5I great responses to concerns about NA.Some statistics by Thomson/Reuters o Oct 8: 1) BMO 2)BNS 3)CM 4)NA 5)RY 6) TD ROE: 1)12.06% 2)13.96% 3)19.24% 4)17.1% 5)18.59% 6)13.75% Dividend Yield: 1)4.3% 2)4.5% 3)4.5% 4)4.9% 5)4.1% 6)3.8% Estimated 2016 P/E: 1)10.7 2)10.3 3)10.5 4)8.8 5)10.9 6)11.4 1yr/5yr Return: 1)-8.2%/+28.2% 2)-12.3/=11.2 3)-1.3/+31 4)-17.6/+29.4 5)-8.1/+35.8 6)-1.1/+43.1 As per BNN re Tier 1 capital 1)9.7 2)10.3 3)10.3 4)9.8 5)9.41 5)9.96 CM is the only North America bank to appear in the World's 20 strongest banks since computed(think in 2011),currently ranked # 18.All our big 6 banks are in the top 50 safest Banks in the World.Our banks operate in an oligopoly environment & the big 6 each takes turn to be top performer.The financial sector is closely supervised by SOFI,an arm of the Federal Gov'T.Recenly many guests on BNN have been positive & recommend the big 6 mainly due to high dividend,historically low P/E & decent returns over time.I am a senior & they are my "sleep at night stocks" in addition to 5I Balanced Equity Port. Thanks

Q: I am a multi-decade holder of POW. Could you comment on how the new mutual fund rules will affect its profits as it owns IGM?

Q: Interesting in your view of CDN banks? Are you seeing value? They are looking like decent value to me and going into some seasonal strength. BMO has been under the radar a bit but appears to have some upside with the new purchase etc. What's your opinion on BMO?

Q: As a retiree I am looking, mainly, for income from dividends which will, hopefully, increase with time. i have done well in terms of capital gain over the years with TD, which I have gradually reduced, but feel I can get better value elsewhere. Specifically with HSBC having a yield of ~6.3% versus 3.9% - both have a history of dividend increase.
I know HSBC has been through a period of re-trenching and consolidation and wonder if this has stabilised the bank now.
Any thoughts on the switch for this ~1.5% holding?

Q: Re the ETF question, another company making money on ETF's is Blackrock, which has the ubiquitous i-shares in Canada as well as in the US.

Q: 8:29 AM 10/6/2015
Hi Peter

In your comment to Robert today you said with reference to Fiera : " Its association with National Bank has not helped recently, with the bank's very bad news."

Comment to Linda yesterday : "We do not like the news, and do not like the dilution from the equity issue. We are also believers in the cockroach theory: i.e. there is usually not just one problem. Shares are also already $1 below the issue price, not a good sign."

Comment to Margot : "We do not think the bank is in 'trouble' but clearly it is concerned about the economy enough to want to shore up its capital."

So My Question is : Can you clarify your opinion? NA makes up 3% of my portfolio. I own 4 other banks in larger amounts. Do you really think NA is headed for serious trouble and should I just sell it [at a 7% loss] or is it safe to hold for years expecting nothing more than the dividend income?

Thank you..... Paul K

Q: Could I please have your thoughts on BAC for a 3/5 year hold.

Thanks, David

Q: Hi Peter, Fiera seems to always announce good results and the stock usually bumps a bit after earnings only to drift lower in the following weeks. It is now at a 52 week low and down again today in spite of the strong day on the market. What is your view of some of their recent moves? Is this still a stock/company you believe in? What is the expectation for Q3 earnings? Thanks Rob

Q: I would appreciate your opinion on FIE for a balanced income portfolio. Will the capital value hold up in our current flat interest rate environment with rates gradually rising over the coming quarters? A big part of this ETF is composed of preferred shares. Will preferred re-sets do better in a rising interest environment? Many thanks!

Q: Hi and thanks for support through this bump in the road. I hold about a 5% weighting in ZWB and it has served it's purpose for income in our RRIFs but with a high weighting in National Bank NA I am wondering if a change to TD and BNS or perhaps CWB Cdn Western Bank would serve us better. Your comments are always appreciated.

Ted

Q: For diversification,if reducing exposure to Canadian Banks,would you provide some recommendations of companies with comparable quality and expected market performance.Thanks.

Q: Which Canadian bank is your favorite, being the one that will offer the most growth and capital appreciation over the next 5 years? TD, RY, BNS, BMO, or CM?

Q: Do you think it is wise to reduce exposure to National bank given the recent news? Thank you.