Investment Q&A

Q: 5I Team,

Which companies in the 5I coverage universe do you foresee being the biggest beneficiaries of the ongoing momentum in the US economy and weakness in the Cdn$?

Thanks,
Scott

Q: Western Forest Products has dropped from its recent high, while West Fraser Timber got back to its high. I assume this is because $WFT was mentionned in an article on Bloomberg as well as in LesAffaires. Do you think that's likely it, or did I miss a piece of news? $WEF, which is lagging, is cheaper and pays a dividend. I'm intrigued. Also, it seems to me forestry stocks are in an excellent position right now, with not only lower oil prices but a lower CAD. I'd love to get your insight.

Q: I have had a position in STB since 2009 (ACB $9.86). To date it has been a very good investment.

Last year I had a good look and to my untrained eye it looks like the Shareholders Equity and Book Value have been steadily deteriorating.

Due to that I reduced my position substantially.

I also noticed that there has been a substantial amount of dilution.

Somebody mentioned that SNCF has been “buying” 95,000 or so shares each month. I believe that they aren’t actually “buying” those shares, they are “reinvested dividends” and a major source of dilution.

The current low fuel prices will help them and the SP has held up nicely. That said I find myself wondering if STB is a bit of a “house of cards” and will ultimately get into serious financial trouble and have to reduce the dividend or worse at some point in the future.

Q: I'm trying to pay more attention to sectors when managing my investments, and I couldn't find much on recommended allocations in your Q's and A's. Should I use the 10 sectors listed on the 5i Summary table, and if so,what allocation would you recommend or the average investor?

Also, referring to that table, I would have thought ENB and IPL behaved more like Utilities than Energy stocks and I'm surprised BAD is listed as Basic Materials. My last question, what category would you recommend for BAM.A? Thanks

Q: Further to Claudette's question on DRT; Mr. Nutall said the the company had a 25% organic growth. How is that possible when its PEG ratio is less than one? Is there some other metric that provides an answer? We often hear on BNN that organic growth is very positive for stock price appreciation.

Q: Currently holding MAL, and somewhat disappointed in recent results,not sure why their price has fallen, and am considering either switching from MAl to CAE, or adding CAE to have broader coverage in this industrial space. Appreciate you input with thanks. JIm

Q: Most recent question and response on this company was July 2014. I wonder if your opinion is much the same as at that time, or do you see an improvement; or perhaps a falling off since then or in the cards for a bit later. Importantly, do you see the dividend which is north of 10% as safe. Thank you very much for all you do

Q: Hello team,
I have 7% gain on my holdings of MOS(+ US$ gain). Does it make sense to sell it and buy AGU or POT in Canadian $ ?
Thank you always!

Q: Air Canada has had a strongly negative day for a stock in an uptrend and one explanation I have read is in connection with the Government interest rate reduction. Is this a valid concern and will it effect the stock price even more?

Q: BCE and BAM have been going up lately. I am up quite a bit on both. The PE of BCE is quite high. Do you think it is time to trim it and pick it up when it goes down or use the proceeds to buy Rogers? What would your view be on Brookfield Asset Management. Thanks very much.

Q: Your opinion on these two, please: DRT for growth, EIF for high income with some growth. Thanks, Ted.

Q: Good Morning
Can you please tell me whether the following three securities are classified as foreign income and whether they have to be reported on Form T1135 ?

ALA.PR.U ENB.PR.U and 5.8% Brookfield Asset Management Bond maturing in 2017. The first two are preferred shares traded in the Toronto Stock Exchange in US dollars. The Brookfield bond is also in US dollars. All three securities are held in a US account with a Canadian Discount Broker in Ontario. The Discount broker reports the income of these securities annually on T3s and T5s.

If they are classified as foreign income, do we still have to report them on Form T1135, even if our foreign property was less than $100,000 in the preceding year?
Thank you for your advice.

Q: Hi:
any fundamental reasons for the jump in the stock price in the last week or so ?
thanks

Q: Any new news on Canadian Tire that is negative. Thanks Alvin

Q: do you have strong feelings about any of the check cashing / payday loan companies thank you

Q: I currently own GG:NYSE and have a paper gain. If the ECB does provide stimulus this Thursday would you sell GG:NYSE and buy a European ADR listed on the NYSE. If they do not provide stimulus would you sell GG:NYSE and buy a Swiss ADR traded on the NYSE, thank you for taking the time to read and respond to my question.

Q: Hi Peter and the team, Both AGU and POT are doing well recently. Under current economic environment, do you think the sector is worth to own. If yes, which name you prefer? I have some new money for TFSA. Thanks.

Lin

Q: I currently have 21% of a well diversified portfolio allocated to bonds, all in CBO, would you consider this % adequate in this market.
If OK could you please suggest 2 stocks that are not in the model portfolio or being considered for being added to the MP that I could add alongside the bonds in a rrsp account.

Q: Hi Peter and Team,
I am trying to add fixed income to my retiree portfolio. Have never been a fan of fixed income since being badly burned in 1994. (long memory) I am thinking CBO 15% in RRIF's,
CVD 5% in RRIF's
CPD 5% in taxable accounts.
Your suggestions are greatly appreciated. I am reluctant to assume a higher allocation.

Ted

Q: Interfor has been in a pretty good tailspin the last week or so. They did a nice acquisition in December, then in January a bot deal at $20.10. The deal was well received and I understand it was over sold by a lot. Anyway the stock is now at $18.75 and seems to be breaking down. What is your opinion?

Thanks!