Investment Q&A

Q: I’m definitely more of a buy and hold investor than a trader, but with David Burrows’ words ringing in my ears – “The money’s gone! The market doesn’t know what you paid” -- I’m reassessing my Cenevous holding of two years (down about 30%) and I’m wary of the fact it’s close to breaking support, according to my Investorline data, at $20.23. In the same account (LIRA; currently has no cash), I also hold a small amount of the ZUB ETF. It’s at the upper end of its trading range for the last year and a half; is trending above its 20 and 200 day moving averages; on the verge of breaking out into a three-year high; and technically has moved up closing a gap with the S & P 500 trendline. I know it’s comparing apples to oranges, but I’m asking for a second opinion on dumping CVE for ZUB. (I have a full position in CVE, as well as full positions in WCP; PPY; and and a one-third position in SKX; in fact I’m considering clearing out all but SKX since there are bearish technical warnings for WCP and PPY as well). Other options: dump Cenevous for cash and either wait for another opportunity or buy Cenevous back at a cheaper price later in the year; or taking the Cenevous proceeds and putting them in Don Vialloux’ HAC ETF, which seems to trend steadily upwards, albeit unspectacularly, with his seasonal investing philosophy. ZUB, Cash or HAC? Your insight is very much appreciated.

Q: Hello Team,

I'm considering selling Sunlife ( up 7% ) and buying Manulife. Going forward, all things considered,owning Insurance companies, would you consider this a good switch?

Q: Good Morning Team,

BMO offers ZUB and ZBK. Both are equally weighted US bank ETFs. Both are sold in Canadian dollars. ZUB is hedged while ZBK is not. If they are both sold in CDN dollars could you please explain how one is considered hedged while the other is not? What are the tax implications for holding these in a TFSA?

Thanks,
Richard

Q: What is your opinion of these stocks - Buy/Sell/Hold?

thx, Ross Siemms (New Subscriber)

Q: I have held cwb for about 5 yrs at an average cost of $22. With regards to the latest quarter and future prospects should I hold or move into another financial. I already owe bns and the eft zub. Thanks.

Q: You were asked a question a few weeks ago about AIG vs. KKR. You noted that US interest rates are likely to rise and that helps insurance companies but for other reasons you felt KKR may be the better buy for growth.

My question concerns rising interest rates and how they would affect a deal making company like (though not specifically) KKR. I see how rising rates help the insurance industry. But wouldn't the same increase hurt KKR since borrowing costs could rise. Or are you of the opinion that the increase will not be large enough so as to dampen merger and acquisition activity, at least in the medium to longer term.

As always, appreciate the wonderful insight.

Paul F.

Q: What do you think about starting a full position on Laurentian bank today primarily for income? Earnings look good to me. I don't own the stock but I'm considering buying it because if I'm right, they do little lending to companies in the oil industry. They also have the least client borrowers who work in that industry. I like that the forward PE of 8.5 and the 4.5% dividend. On the other hand, the valuation has always been less than the big banks so maybe the cheap PE isn't worth factoring.

Q: Hi 5i, Herberts question about special dividends, A couple of years ago Peter said some good things about GS so I bought into the company, the special dividends were much appreciated.
Hope to see more in the future.
Thx Gerry

Q: I currently hold these financials: BNS;CXI;DFS.US;EFN;MS.US;RY.
I would like to buy more EFN by selling my weakest financial security. Could you help me decide? Much appreciation for everything you do!

Q: Hi Guys, for a balance portfolio with a 5 year time frame, does trading BNS (2.5% weighting) or TD (3%) or POW (1%) for EFN make any sense? If so, should it be a full position?

thanks,
Jim

Q: If banks use CXI for currency exchange, and the company has good earnings & growth potential, do you think one of the big banks will simply buy them out? $220M market cap seems like peanuts for a bank looking for a competitive advantage.

Q: Hi 5i: I have too many stocks and am trying to consolidate. I'd appreciate your comments on my financial holdings, which are a little over 15% of my portfolio. On the C$ side I have: SLF (3/4 position), EFN (full) and CXI (1/2); on the US$ side I have JPM (3/4), C (1/2) and KRE (1/2). I hold some Canadian banks in separate dividend portfolio that I am not concerned about right now. In my active portfolio I would like to hold maybe 4 financial stocks with weights that balance out risk and provide some diversification within the sector. Your comments would be much appreciated. Suggestions to swap some of what I hold for other stocks would also be welcomed.

Q: Would it make sense to sell td, and buy SLF, recognising the impending interest rate rise.
Thank you

Q: Hi Team:
the BNS and BMO have raised the dividends, while Royal and TD has met expectations of their earnings but have not followed suite in terms of dividends, are they a good buy or hold for a long term 3-5 years hold for dividends and abit of capital gains ? or should I be patient and wait for a pull-back ? Thanks

Q: Hey Peter & Team,

To date I have done very well on EFN and yesterday as a prudent measure not ever wanting to be the pig that gets slaughtered took some profit off the table.

Today I noticed the recent financing via Element Financial Corp Sub Receipts (EFN/N) is up almost 9% from $17 - $18.50 on 2.02 million volume while EFN is down 1.22% to $18.57.

Can you help me better understand the relationship between these two issues and what EFN/N increasing from $17 - $18.50 means for us little people.

Thanks for all you do

Gord

Q: Can you sensible describe a "crowded trade ". Jerome Hass was wittering on about this on Bnn on Fri. and said that his hedge fund stays away from these type of trades. One of his recommendations then was cxi, and ,if this is not a crowded trade, then what is? Can you lift the fog . thanks

Q: With the additional insight provided by recent bank earnings reports do they present value here considering future prospects?

Q: The BMO shares are down over $1.00 at the moment, far more than the other banks. Yet BMO raised their dividend and the results for the quarter slightly beat expectations. Why the drop in value?

Q: I currently own both Canaccord and Fiera with a significant loss on CF and not much to show for FSZ during the past year. I originally invested in these because I was looking for something different from the traditional banks and wealth management and deal making in a growth environment seemed ideal. Do you still see value in these because Element is of interest and I am wondering if a switch out of one or both is in order.

My concerns with EFN are two fold. First, there has been much discussion about them buying a big part of GE's leasing business. I am assuming that this is reflected in the price. So, if that deal does not go through, would you expect a sharp price decline.

Second, they are quite exposed to interest rates changes. You have discussed this previously as it pertains to EFN and you noted that interest rate increases could negatively affect the stock. Do you make your recommendation to buy this based on your belief that rates are not going up or that they have the administrative where with all to weather that storm?

Thanks for your insight.

Paul F.

Q: I bought FN for income and modest growth. I read they have the highest PE ratio of 17.91, comparable to other special industry financials. With the recent results, (losing market share)what is their chance of revenue growth this year. Thank you for providing such a valuable forum. Greatly appreciated.