Investment Q&A

Q: Thank you for helping us navigate through the volatility with a cool head. I have 2 questions.

In a long term horizon 3 years and more for the above list could you separate them into 3 buckets and identify 1 group for which you would add funds, 1 group to keep and 1 group to sell? All stocks mentioned are now reduced to 1% or less in a non-taxable portfolio.
XBC -20%
AT -15%
CARE -50%
LSPD -45%
DOC -60%
WELL -30%
EGLX -30%
ENGH -30%

My 2nd question:

For the following securities in a corporate account with a 2-year horizon. Do the same exercise and separate into 3 buckets which ones you would add funds to, which ones are keepers and which ones you sell.
AT -50%
LSPD -45%
DOC -60%
WELL -30%
EGLX -30%
ENGH -30%

Thanks again

Q: About 1 year ago we created an equal-weighted 'balanced' portfolio of 30 Canadian companies in a non-registered account. Most were chosen from companies either covered by a 5i research report or included in a 5i model portfolio. The remainder were chosen, based on the 5i Q&A section, from what appear to be 5i sector favourites. All purchases are made with the intent to be long-term holds (10+ years). As well, we intend to increase our investments over the next 2-3 years, and then adjust over time as needed. Currently the amount invested represents ~40% of the eventual total.

Although a goal is to keep the portfolio roughly equal weighted, of the 30 companies, the following 14 were acquired in 3 purchases (full position) and currently have weights in the 2.31% (SHOP) to 5.00% (ATA) range for an average of 3.71%: CSU, MG, GSY, WSP, LNF, ATD, ATA, SLF, BAM.A, BIPC, FTS, DOO, SHOP and TFII. The remainder were acquired in 2 purchases (2/3 position) and currently have weights in the 1.98% (BEPC) to 3.17% (TCN) range for an average of 2.56%. So, overall, the weightings currently range from ~2% to ~5%.

Over the next 6 months we will invest another ~25% of the eventual total. As we make additional purchases, we need to strike a balance between keeping the weights roughly equal while taking advantage of market opportunities. Please provide some broad guidance/wisdom.

Of the 30 companies in the portfolio, which 10 would you have the highest conviction in today? Please rank them.

Are there any of the 30 that you might consider as candidates to be replaced because there are better options, and if so, what replacements would you suggest and why (disregard tax considerations)?

What additional 3 Canadian companies might you consider adding to the portfolio and why?

As always, thanks for the great service!

Q: Retired, dividend-income investor who usually has ALL of my cash at work. I am currrently sitting on roughly 2.5% cash and am considering topping up the above holdings to achieve my asset allocation targets.

Q#1 = Assuming a diversified portfolio, if I wanted to deploy my remaining minor amount of cash, in what order would you spend it and why?

My view is as follows:
First = PBH and WSP (good value right now = fundamentals and technicals look good, if you ignore the death crosses).
Second = ZRE (should do ok in a rising rate environment?).
Third = XIT (wait until at least the first interest rate increase has happened?).
Last = ADW.A (may need another quarter or two to get past the Covid impact).

Q#2 = or should I continue to sit on this cash if you think there are better opportunities coming in the future. It's not as if this minor amount of $ is going to make a huge impact on future performance.

Thanks...Steve

Q: Of the above mentioned stocks, would you please list in order of first to last which would you recommend today. Also a brief explanation as to why you chose the first and the last. Thanks … Cal

Q: What are your recommendations for 5 Canadian Stocks and 5 US Stocks for an RRSP Account?

Q: In yoor recent reply to my question regarding how to evaluate returns, you suggested CDZ. Thanks for that, it does seem a better comparison. Of interest, though, I did a comparison of CDZ to the TSX return, and found that the only difference over 10 years was the actual management fee of .66%.
I also appreciate your comments about risk. I had about 20% of my investment assets in "play" money, but over the last 2 or 3 years I have reduced that to essentially nothing, since - as you pointed out - an extra percent or even more would not make any difference to my lifestyle. That frees up my time, and I do sleep very well at night!
Thanks again!
Paul K

Q: I might have missed it but in reviewing your portfolios I notice these two names absent. I hold them for longer term gains but am wondering now if they may be more risky in an adverse even "bear" market?
Thank you

Q: Hi 5i,
Two questions if that's OK, and please deduct accordingly.
In October you counseled me to not sell ATZ when it had reached $50 and I was tempted. I'm glad I listened to your advice then and held on as it's now up a another $8 and my gain is about 90%. Your advice then might still hold - don't sell the stock just because it's up. But the economic backdrop is considerably different now than it was in October and I wonder if you would still counsel holding on, especially since a lot of what otherwise might be discretionary income could be going to servicing debt going forward, and consumers might just generally feel like reining in the spending.
Also - CURA has not been so kind to me and I'm down 50%, meaning I need a 100% gain from here to get back to square one. My understanding is that it is a good company but the regulatory framework in the US hasn't changed as was needed/expected, and the stock is therefore wallowing. So, sell and put the money to work elsewhere, or ride it out for a while, bearing in mind it needs to do very well to even begin to heal the wound it caused?
Both are in a TFSA.
Thanks!
Peter

Q: In a response to Craig on 19 Jan you stated that "Without reference to goals or risk, we would side with the significantly larger and more diversified BAMR". TD Waterhouse lists the market cap for BAMR at $534 million whereas TSU is listed at $1.8 billion. However I see that on your profile page you list BAMR at $1.93 billion, only slightly higher than TSU.

Q: I am looking at ALC and CNR. What are the fundamental reasons that CNR commands a much higher P/E? Is this all about growth prospects? Also, how is "fair value" determined by Morningstar?

Q: Peter; It looks like the EV sector is out of favour- most of the stocks, GM,F,MG.LNR,LAC er are all off from a couple of weeks ago. What’s changed ? Thanks.Rod

Q: Two days ago I saw an article on 5i about new ipos and focusing on 10 to watch. I can't find it now. Is there a way to find it again? It was interesting. Ron

Q: Please provide the fundamentals of Aecon.
Is it a good company to hold in a volatile environment? If not, please advise which company you prefer in the same industry.

Q: for a RRIF and LIRA, what 5 names, both Cdn or US names would you suggest considering at this time. for the RRIF, more conservative suggestions as the funds will be withdrawn over the next 5 years and for the LIRA, a balanced approach with a tilt to growth, but excluding cyclical positions, that will be held for the long-term without active trading....thanks....Tom

Q: Hi 5i,
I currently own Cnr 4%, ata 3%, tfii 3%.
For diversity and best 2022-2023 prospects, which does 5i like best: aos or itw or wsp? Which has the highest projected growth for the next two years? Which is the best value at today’s prices? Is there an industrial in Canada or the US that 5i likes better? Perhaps Nvee?
Tia,

Q: As noted in my previous question on the drop in Lnr re:the headwinds it faces and at my book at 70$.Would you consider that going forward in 22 that at a price of say 43$ that ENGH has more upside potential? Make any sense to swap or hold? Tks.Larry

Q: When I compile your recent responses in the current January market, these two stocks popped out as looking like reasonably good buys now. Is my complier working okay (its pretty old)? Did I miss one or two better ones? Thanks as usual. Dan

Q: I currently hole MMM in a dividend portfolio on the US industrial side and thinking of ITP on the Canadian materials side. Are these to companies too similar in nature to include in a diversified portfolio? Would you have another dividend grower materials related stock to consider?

Q: Please provide your top 3 US and Canadian industrial stock recommendations. And, what is the best ETF to cover industrials?

Q: Can you comment on CIGI's Basalt investment and your opinion on their outlook? In light of this, which would you prefer between CIGI and FSV? Thanks.