Investment Q&A

Q: Hi Peter and Team,

In my RRIF,I have 1425 shares of ABT with an average cost of $9.7042. (ABT closed today at $8.33).

In today's mail, I received an "Offer to purchase for cash, up to $50,000,000 in value of its common shares at a purchase price of not less than $7.75 and not more than $9.00 per common share". If I want to accept the tender offer, I need to inform my broker by Sept. 30.

I am confused as to what course of action I should take, or should I do nothing and hope that this share buyback will increase the value of my shares, hopefully above $9.7042? It's obvious that I bought high, and would feel better if I was able to sell at at least for what I paid. Or is ABT's range for this tender too low, and they think that the stock isn't worth any more than $9.00, and I should tender my shares for $9.00 in their "Dutch Auction"? (The other alternative offered by Absolute is to let them determine the price which could be as low as $7.75 or as high as $9.00).

Sorry for such a convoluted question, and as always, await your timely advice.

Q: Hello 5i Peter and Team, I need to diversify, I have not rebalanced in years!
I currently own AD, BMO, DH, IPL, MCD, WCP. What stocks would you recommend to add to this list for more diversity over the next 6 months. I like dividend payers but do not need income yet. I am comfortable with a certain amount of risk.
Thank You

Q: Are you a fan of the frequently expressed strategy of having your per cent of fixed income match your age? I suspect this is a personal decision based on one's risk tolerance, but as a general rule does it make sense? For myself, 50+ in fixed income seems like a lot.

Q: Hello 5i,
I am presently underweight the tech sector. Assuming I own equal weights AVO,DSG,GIB.A CSU and MDA which one should I add to today? Or bring a new company into the portfolio?
Many thanks, Doug

Q: Me again, I emailed Intertain and this is their response (a relief?):

Hi Silvia.

This call is to discuss the existing MIP as outlined in Intertain’s Management Information Circular dated May 20, 2015

Q: Hello Peter, Ryan & team, "Manag. Incentive Plan"...what are you expecting out of this? And, how would it affect the stock price?
Thank you!!

TORONTO, ONTARIO--(Marketwired - Aug 31, 2015) - The Intertain Group Limited (IT.TO) today announced it will host a conference call with members of the investment community to discuss its Management Incentive Plan on Tuesday, September 1, 2015 at 8:00am ET.

Q: I'm looking to increase my exposure to the materials sector and invest in either ADN or WEF. Could you provide your analysis of each and which is the better investment.

Q: Please update your opinions of West Fraser going forward. Thank you.

Q: Hi peter - I recently sold BYD.UN - LNR (did very well) - I want to buy a Canadian company and then have my broker switch to a US account. I believe that @10% I am underweight in the US. The Canadian dollar is still falling /not showing any sign of - The struggle I am having is I really still like the auto sector. LNR has really dropped from its $89 Cad high. Do you believe that (a) the Cad $ is headed lower. (b) MG has still got room to grow compared to LNR. (c) I am better off buying AGU and get out of the Auto sector? Any other suggestion would be welcome I am a moderate investor who likes stability/growth ...Thanks for your advise

Q: Hi 5i team. Thanks for the great service. BAM recently invested in infrastructure in India. Does that in any way affect Brookfield Infrastructure? It seems, to me that sometimes the assets are passed on or are sold to the subsidiary. Can you comment please if this might have long-term impact on Brookfield infrastructure?. I have been focusing on building positions in Brookfield Infrastructure and Brookfield Energy Partners

Q: Dear Gentlemen,
I want to re-balance by adding in Industrial sector 6.%. from 10 to 16%
I hold these stocks in different PF: BDI 1,1% (-50% in value) MDA 1.6%, STN 3.3%, & WSP 4%.
For a balanced medium aggressive PF, your suggestions, adding new stocks or increasing actual stocks?

Thank You
Best Regards

Q: Could you comment on their latest results? This is a painful long term holding, down 10% over several years in a stock that should provide stability in a choppy market. Perhaps the market does not like their expansion plans? The chart trend is terrible and shows no attempt at stabilizing. Time to get out?
Thank You Ron

Q: Dear Gentlemen,
I want to reduce my % in Consumer Staple by 4%. From 9 to 5%
I hold these stocks in different PF: ATD.b 5%, L 3%, VDC: US 1%,
Your suggestions to reduce/eliminate for a balanced medium aggressive PF
Thank You
Best Regards

Q: I believe that 5i puts more faith in Point and Figure charts than just about any other technical indicator; when the Diamonds - DIA - were at $165 last week the bearish price objective was $151, which was met last Monday. Currently stockcharts.com has a bearish target of $123 which would imply a further downside from here of over 4000 points on the Dow Jones Industrial Average. The SPY target is $153, almost as bad in % terms. Any comment on these observations? Also how much use are P&F targets on indexes vs. individual securities? Thanks, J.

Q: Dear Gentlemen,
I want to re-balance PF by adding in Tech sector, 6 %. From 12 to 18%
I hold these stocks in different PF: AVO 3%, GIB.a 1%, CSU 4.2%, DSG 2%, OTC 1.5%,
For a balanced medium aggressive PF, your suggestions, adding new stocks or increasing actual stocks?
Thank You
Best Regards

Q: Hello Peter & team,
The interest sensitive RE/Telcos/utilities sector represents 9.2% of my portfolio; it comprises BCE,BEP.UN,CIG,FSV,TCN. The last 3 have contributed to a healthy 24.7% total return so far this year.
As I also own BAM.A and BIP.UN (in other sectors), I'm thinking of adding BPY.UN to this sector and thus adding 1.4% to the sector weighting.
Your opinion is most valuable.
Thanks,
Antoine

Q: Your opinion on this company and is it a good time to buy?
Thank you.
Do you cover Starbucks (SBUX)?
If so, I would appreciate your opinion on this stock.

Q: Dear Gentlemen,
I want to reduce my % Consumer Cyclical by half from 26% to 13%.
I hold these stocks in different PF: AW.un 3%, CCL 4.2%, CGX 3%, GIL 2.8%, LNR 1%, MG 4%, NFI 2%, WPK 4%, DHX 2%
Your suggestions to reduce/eliminate for a balanced medium aggressive PF

Thank You
Best Regards

Q: My friend is coming into $150,000. She has 75k credit card debt and is asking for my opinion on how to manage the money. She doesn't need income from the money and plans to put it away for 20 years. She has no other investments. I said pay off the credit card debt first, max out the TFSA, and put the rest into an RSP. I recommended Vanguard funds covering approximately 30% Canada, 50% the U.S., and 20% the rest of the world, with about 80% of that in stocks and 20% fixed income. It's enough to make a nice etf portfolio consisting of VCN, VXC, VSP for the equity portion, and VAB, VBU, VBG for the fixed income portion. Does my advice sound pretty good? Am I in the ballpark? Thank you.

Q: Any thoughts on the Exchange Income (EIF) financing? The press release says the financing is to "to pay down debt and for general corporate purposes". Do you think this signals EIF is on the lookout for another acquisition?

Lastly, any idea why the one analyst who has come out with EIF's estimated earnings for 2017 is expecting minus 44 cents per share?

Thanks, again, and looking forward to renewing my subscription soon.

John