Investment Q&A

Q: SCHW is down ~6% today, March 30, after a downgrade by Morgan Stanley. CFRA issued brief research yesterday rating SCHW a “Strong buy”. Although TD owns (I think) a chunk of SCHW , TD:us is up today. I had been planning to buy SCHW thinking it was being overly punished for the sins of others. Granted, deposits are flying out, but its CEO is quoted a couple of weeks ago to say that even if clients demanded all their deposits back, SCHW would still remain liquid. I am going from memory and am now unsure of the veracity or reliability of information I refer to above.

SCHW still strikes me a reasonably good opportunity at today's price. Would appreciate your comments, preferably with some depth, if you would please. Thanks

Q: Dear 5i team.

There have been a few questions lately on HMAX vs ZWB and all the responses thus far discuss the upside potential and difference in strategy. What are the downside risks of these two aproaches to their covered call strategies? Has the recent volitility in Banks given us any insights into this part of the question, or are we still in speculate on outcomes mode. If the latter, please provide some educated speculation on impact of continued downward draft in Bank equity prices.

Thanks for your insights.

Arthur.

Q: Is BAM exposed much to commercial real estate? What percentage of their cash flow is from this sector? Thanks

Q: How do these two ETF's compare?

Q: Hi 5i
I thought one of the Canadian banks (National?) had a large interest in FSZ. If this is the case would it be less likely that FSZ would consider cutting the dividend ?
Your thoughts on the dividend safety at this time.

Thanks

Q: I hold Goeasy and am down over 40% on my purchase price. I am thinking of getting out. Do you have anything in mind as a suitable proxy. Thank you.

Q: FLI has a good dividend but it is on its declining share value. It is contradictory in its performance as higher interest is supposed lift Life Ins companies earnings. Please advise what is the way to find out how these ETF burning through capital and do you have alternatives for this sector of financial cos.?

Q: Hi 5i, my question is on all financials impacted new taxes.

"Dividend tax change: Ottawa is planning to raise billions of dollars from banks and insurers through a change in tax rules on dividends that financial institutions receive from Canadian companies."

Can you put a guess on how this will impact investors?

Thx

Q: I an down about 25% on gsy. Would you suggest to hold, sell or buy more on this down turn? And do you think that the company may reduce their dividends as well? Would appreciate your advise here. Thank you

Q: Do you think Citi's high dividend is sustainable? How do you think this bank in long term? Is it good time to initiate a position right now? Thanks.

Q: Goeasy has always traded at a reduced multiple due to the risk of the government lowering the maximum legal interest rate. Now that has happened, do you see a multiple expansion opportunity once GSY has proven they can still grow the business? Also, do you still see it as a dividend growth story?

Q: Hi Guys
TFC Can you comment on the balance sheet strength on this bank.
Would it be a good choice ?
Thanks Gord

Q: Hello,

Has management responded to your inquiry about Canada drives? Can you please shed some light on where you sit with go easy at these levels .

Q: Can you give me an in depth analysis if all the news coming out of Onex. The pros and cons and long term outlook, management, insider ownership and portfolio holdings. Thank you.

Q: Thank you for your reply this morning on my question about ZWB and HMAX . In your reply you indicated a preference for ZWB because of the upside potential being greater . Am I right in assuming that if that is the case HMAX would be the less volatile of the two ?

Also in 2018 I asked 5I to crunch the numbers on the big five banks over the 18 years { 2000 to 2018 }... I would assume that is a long enough segment to determine an average annual return of dividend plus capital gain. The answer I got ranged between 11% on the low end { TD } to 14.3% on the high end { RY }...... Please correct my reasoning but to me it looks like HMAX with its' current 15.1% dividend based on today's cost of the ETF is going to slightly beat those numbers annually, have less volatility, and give me diversification as an added bonus ? ..... Please advise if my reasoning is sound .....Thanks Garth .....

Q: Morning, GSY makes us a total of 3.4% (or did lol) of my portfolio with half in a non registered account. My thinking is sentiment will be bad for a while and the true impact of the budget will need to be assessed. I'm contemplating holding the GSY in the registered accounts while tax loss harvesting the non registered. If it were your account would you do it differently?

Rhetorical question - how much of yesterdays selling was leaked information from the budget vs the potential $41M loan loss?... I'm feeling like the latter was a key driver in the 9% fall yesterday.

Q: In a couple of previous questions you have mentioned that the drop in GSY's share price on Thursday was due to the Canada Drive news. There is something else that needs to be considered. I saw a post on Stockhouse on Thursday at 2:35 p.m., well before the close and the budget news, indicating there was a rumour the federal budget was going to include an interest rate ceiling of 35% and this was why the stock price was going down. The poster stated the rumour was likely true as it had apparently come from an unnamed staffer. Obviously the rumour WAS true as the exact ceiling % was mentioned.

Seems to me this is the main reason why GSY's stock price dropped so much on Thursday - some people had this inside info and were selling the stock as a result. I know there is a lot of nonsense on Stockhouse, but occasionally you get something important.

In any event, after reading the press release that GSY put out last night, do you have any change in your opinion on the desirability of GSY as an investment? Does the stock still look cheap?

Q: The last couple federal budgets have had measures that increased taxes on banks and insurers. Personally, I don’t like taxation based upon the nature of a business - I think it’s bad policy - but banks will always be viewed as targets for government revenues. Do you think it is reasonable to reduce/divest bank holdings based on the last few budgets tax targeted measures and concerns of this continuing in the future.

Q: Is the decision by Trudeau to reduce interest rates on loans offered by GoEasy really bad for the business?

Q: Could you please comment on TRI, its valuation and why it defies gravity seemingly independent of its peers? Does it have comparables and what is future growth potential?