Investment Q&A

Q: Where can I find on 5i website News and Report Updates at 5i Research emailed yesterday at 4:44pm. Thank you

Q: I wonder if you can point to an article or other guidance on what key metrics to look at and how to interpret them for a stock. Being relatively new, I tend to look mostly at profitability and revenue growth on a go/no-go basis when looking at a company in the absence of other info (ie 5i recommendations). Using REAL as an example, total after tax profitability is only 9% and 3 yr revenue growth is a tepid 8% and falling from a 5yr rate of 17%. These numbers are underwhelming compared to other co's, so I must be missing something with a company like REAL, and would like to learn how to see a little deeper.

Q: By mistake , I bought CSU & ATD.B using money from my US investment account. Now the stocks are shown in my US investment account priced in US dollars. Would that have a tax implication on dividend credit or when I sell ? Thanks for your expert opinion.

Q: There seems to be a variance on stop-loss pecentages for investors that use.Could you give an opinion on same ?

Q: Hi, If one is anticipating another market downturn , could you please suggest some investment ideas in CAD ? Thank you

Q: Dale asked a question about market conditions and economic analysis. There is one site that gives an outlook once a week. It is, of course, one particular view. But, I find it interesting. The site is called Options Play and the chief strategist is called Tony Zang, if the site below doesn't get you there. They do a market outlook once or twice a week:
https://www.youtube.com/watch?v=ByKBd7VFqbI

Q: Hello Ryan and Peter:

I hope you are all staying well in these trying times. We had our stock club meeting last month and one of our members was promoting hard for preferred shares because of the dividend. We purchased it for the club and I would like to know what are the advantages over the common share beyond the obvious of:
1. Preferred shares have higher pecking order in case of bankruptcy.
2. Dividend of the common share will get cut first before the preferred share dividend cut.

I see more disadvantages than advantages:
1. Dividend of the common share is similar to the preferred.
2. Very illiquid on the markets. The preferred can only trade 3000-5000 per day while the common share trades in the millions.

The slight difference in the dividend does not appear to be worth the risk of illiquidity. Also the higher pecking order in term of bankruptcy seems pointless when it comes to Canadian banks. Also the point of the common share dividend getting cut is not a big advantage when the big banks have not cut their dividend in over 80 years and National Bank I don’t include as one of the big banks.

Is there something that I am missing here.


Regards,

Brendan

Q: I have a personal line of credit for more than 20 years and I am now in the process of securing a business line of credit. So far the big bank that I deal with for my personal life is being a ‘pain in the butt’. The interest rate and other terms are not favourable to my business. The requested loan amount is $100,000 +/- and my collateral is $60,000. Any suggestions from your or others within your 5i family would be appreciate.
Clayton

Q: Can a company cut the dividend on their preferred shares as easily as they can on their common shares?

Q: what is the best source(s) for current and future individual company info like eps and current news. thanks

Q: I am perplexed by the strength of the markets over the last few months given the situation in the real economy. Are you aware of any site which identifies the source of money inflows and outflows? I would like to understand whether this market is driven by professional/institutional investors (smart money), the government/Fed, or retail investors (dumb money).

Depending on the source of the money inflow, it might give some indication as to the sustainability of this market.

Any thoughts you would have on this question would be most appreciated and valued.

Thank you for this excellent service.

Q: Could you provide internet sites to give me information on insider buy sell information for both Canadian and American stocks

Q: Peter,

Dividend sustainability is a significant concern to so many investors. You mention Free cash flow as a good measuring stick. Is there an industry consensus of how this is determined? For instance on Telus ( FYE Dec 31,2019) annual report shows free cash flow of $932m, with a disclaimer note about no industry standard . Morningstar shows $33 million free cash flow for the same period. Both sources show $3,927m as operating cash flow . Which one do you recommend as the most accurate predictor of the ability of a company to sustain or increase their dividend payouts ? If it is free cash flow, what source / formula should one use?

Thank you,
Paul

Q: Thank you verymuch for your answer to my rather meandering question the ther day. I suppose the gist of the question was whether, given the dangers of these two etf's in the present context, whether i should move away from indexing and pick individual stocks. You say that if i pick a good selection of ten individual stocks, i should have good diversificatin and might not benefit that much from an etf. The big fear i have of individual stocks, though, is of one of them blowing up or being severely disabled. That is in my view the main thing that an etf would help me with. Now, i know that no one else can make these decisions for someone else. It helps me to clarify the problem by running it by knowledgable people like yourselves. Thanks

Q: We have our accounts at TD. From our USD cash acct, we bought RTX today. The receipt shows $66.01 per share with one lot of 400 shares @ market, estimated principal $26,404.00, commission 9.99, estimated total $26,413.99.
Why the estimated amounts?
After COB we saw in account activity that the total price increased to $26,419.99
Its a small amount but is it legit?
Many thanks in advance.

Q: I found your article regarding the difference between the Fang stocks and a small cap stock index very informative and interesting. Perhaps an even more interesting comparison, at least for me, is the difference in performance between VOO and RSP. One a market weighted US etf and the other an equal weighted. There is quite a large divergence between these two in the past while. VOO has the top five holdings as Fang stocks--over 20% of the total portfolio. RSP has no fang stocks in the top ten.
It has me thinking. But, what conclusion to draw? I have been wanting to move away from individual stocks to etf's, especially in my US holdings. But, this makes me wonder whether I wouldn't be a lot better with individual stocks, say the top ten that you mentionned in response to a question today. In that way I wouldn't be burdened down with a group of non performers, as in RSP, nor too heavily invested in Fang stocks, as in VOO, in the event of a future crash.
I know that it is not too good to change strategies often but I am quite perturbed by this. I don't know if you can offer a comment on this or not. But, I appreciate 5i as a sounding board and any comments you have are always helpful and useful
thanks

Q: this is a link for Ellen who asked about ethical investing. This is a Canadian site but also looks at US stocks:
https://investingforthesoul.com/podcasts/

Q: Could you please explain the following questions in terms easily understood. Price/earnings - what are reasonable numbers/the low and high end and I gather the lower the better - is that correct? Debt to equity ratio - same thing as above but 1.15 - is that $1.15 in debt for every dollar you own? Price to book - what kind of numbers am I looking for there, i.e. if the price is $80.00 and the book is $40.00 - is it 2x book?

Q: Hi,
This question is more curiosity than anything - is there a reason that on May 29th the volume on the TSX actually appears to have exceeded any of the days in March as the markets slid worldwide? I thought that as a market recovers, often the volume decreases as things settle down, so the May 29th spike piqued my curiosity. I use Stockcharts.com and saw this on a daily chart. Thanks for all your hard work educating us!
Dawn

Q: Hello,

My partner and I heard about 5i from a friend whose been using you for many years. You came with the highest recommendation.

I feel like I should be copying one of your portfolios, especially due to my lack of knowledge, but it is very important for me that my investments to follow my ethics.

I would like to know which companies on your balanced and growth portfolios would be highest on positive environmental, social and corporate governance, which are low and should be switched and for which companies. I'm happy to do research, but I'm struggling to navigate the important statistics and feeling incompetent in finding good resources. I have seen your ESG scores (https://www.5iresearch.ca/blog/ESG-tsx-companies) and would be keen to know where to find information on how they are created. I would also appreciate other resources that you think would assist in building a portfolio, or simply which companies you would put on it.

Thank-you,
Ellen Perkins
Ucluelet BC