skip to content
  1. Home
  2. >
  3. Investment Q&A
You can view 3 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I am not an accountant or financial guru but I have learnt a few things. One thing I thought I learnt was to value resource companies, particularly oil companies, on a cash flow per share basis instead of an income per share (P & E). I assumed that is due to the fact the product that is being produce is non-renewable. I am I right on this point? If so, then why do people who are supposedly financial gurus who appear on BNN continue to evaluate a resource company on a P/E basis. This happened last night with Ross Healy. Healy has been in the business for decades so he should know that P/E are not a good way to evaluate resource companies, yet that was the metric he used. He is not the only guest on BNN that has done this. On the other side are the Eric Nuttall types who appear on BNN and spew out cash flow numbers that sound amazing but when you dig a little deeper his numbers don't take into account sustaining capital that is required to offset declining production. Who cares if a oil company has $300 million of cash flow when they need to spend $300 million to offset declines. I use the word free cash flow meaning any cash that is left over after enough money is spent to keep production steady. Is this the right term? I know that guests' opinions on BNN should be taken with a large grain of salt but do you think these guests are trying to sway the viewers opinion to move a share price. Apparently foreigners ae not interested in Canadian resource stocks and most of the big Canadian money managers don't seem too keen on them either. So who is left to buy Canadian resource stocks? Us little retail investors. Can a comment on BNN's market call actually move the needle on smaller companies by influencing us little retail investors, in your opinion?(I guess there are three questions here.)
Read Answer Asked by Paul on February 14, 2019
Q: I have a capital loss that I want to crystallize in VET, and I was considering buying PPL to maintain sector exposure. I still believe that VET is a company that I would like to hold long term, but I have some capital gains in 2018 towards which I can use this loss to reduce my taxes in my 2019 return.

My concern is that VET could potentially have large gains in the thirty days that I would need to wait in order to crystallize my loss before repurchasing it. My secondary concern is that since VET is paying a substantial dividend (approx. 8.7%), that I might be better off just collecting my dividend and standing pat.

Please let me know what your thoughts would be regarding this idea. Thanks so much!
Read Answer Asked by Domenic on February 12, 2019
Q: I have held TOU for some time and am disappointed in the performance to date (and of late) and am in a tax loss position. Do you think it's time to sell and look for better opportunities? Do you think it's "necessary" to hold any energy stocks at all in an otherwise diversified portfolio?

Thank you,

Doug
Read Answer Asked by Doug on February 12, 2019
Q: Just listened to Ross Healy on Market Call tonight, with regard to Vermilion. He is saying the stock is only earning $1.05 per share and paying out $2.76. Has a share value at $24.00 per share. Other analysts have different analysis on the stock and buy rating like 5i. Please explain the difference in opinion.
Read Answer Asked by kenneth on February 12, 2019
Q: I own PEY - would you continue to hold with the low P/E and dividend being well covered but the trend is not good or would you sell and if so, why would you sell? If you recommend selling, what would you buy with the proceeds and why?
Read Answer Asked by David on February 11, 2019
Q: Since the bump in these stocks last fall, presumably tied to potential LNG related opportunities, they have fallen back to earth and BDI is not far off its 52 week low. Could I get your thoughts on why the change in sentiment and also your opinion on starting a speculative position in one of these stocks. Thanks
Read Answer Asked by Morgan on February 08, 2019
Q: At the current share price of around Can $3.50 CPG has an enterprise value of about 6 billion ($4 billion in debt and $2 billion in equity). CPG produces about 175,000 boe per day so that means it trade at around Can $34,000 flowing barrel. Isn't that an extremely cheap valuation? If so, could that cheap valuation attract a takeover offer. Even at a 50 per cent premium CPG is trading at a cheap price on a flowing barrel metric. Or is there such a lack of interest in the Canadian oil patch that no body cares that it trades cheaply?
Read Answer Asked by Paul on February 07, 2019
Q: I am down on ARX and TRP.
Are these two worth holding on to or should I move on.
What are a good substitutes for them.
Thanks in advance
Read Answer Asked by John on February 07, 2019
Looking for more? Sign up for a FREE 14 day trial! No credit card required

We invite you to sign up for a 14 day free trial of 5i Research!
Experience all the benefits and tools we have to offer; stock research, model portfolios, Q&A with our experts, and so much more. Join a community of like-minded investors today!