Investment Q&A

Q: Hi there,
I am sitting on some US$ in my trading account. I basically follow your balanced portfolio plus some of your growth picks. I can't decide what stocks or ETF's to buy with my US $. My American holdings consist of Disney and VXUS. I realize you don't cover American stocks. What would be your top 5 picks in the US market. I can handle a moderate amount if risk and have the ability to hold long term if needed.
Thank you,
Kerri

Q: Hello Peter
I own Alergan stock and Pfizer & Alergan announced today 160 billion merger

The deal values Allergan at $363.63 per share, about 30% more than its price when reports of a deal first surfaced last month.

Allergan shareholders will get 11.3 shares of the new company for each of their shares. Pfizer shareholders will get one share of the new company’s stock for each of their shares.

After completion of the deal, which must be approved by U.S. and European regulators, Pfizer shareholders would own 56% of the combined company.
My question is what should I do with my shares, sell or wait for closing of the deal and what is good and what is bad in this deal for me as a shareholder.

Regards Andrew B.

Q: I would appreciate your opinion of FAF.us at today's price of $38.19.

Q: Thinking of doing some bottom fishing here with either Finning or Caterpillar which both are long term performers. Any thoughts on my strategy of picking up some shares on the cheap for a long term hold and would you prefer one company over the other?

Q: I would appreciate your thoughts on Chipotle. With the drop from the recent E. coli issue, is it a good time to buy? I suspect the E. coli issue will blow over, but do you think it will be able to maintain its growth rate, and if not, how quickly do these types of companies fall out of favour? Thanks for your insight. Great service!

Q: With Nike announcing stock splits do you think it is a good long term buy and hold at new levels? When I buy nke does it mean I Nike class A shares or class B shares, does this matter?

From a buyers point of view, does it make sense buy US stocks before or after interest rate hikes? What is the tradeoff likely between stock prices and US$ (assuming one needs to convert CAD to US?

Enjoyed your talk on BNN! Great job. Cheers, Shyam

Q: Thank you for your great service. I dont know if you know this company or not but the stock declined 35% on November 20 as a result of unfavourable future guidance. I have taken a financial hit but fortunately this security is a very small percentage of my portfolio. If you feel comfortable answering the question I would like your opinion as to whether I should sell, add more or hold. Thank You.

Q: Hello Peter,
Could you give me your analysis on Imax and would you prefer it to Disney to take advantage of the strong slate of movies coming up in the next year,
Thank You,
Barry

Q: In response to my last question, you named VLS and XLI as possible industrial etfs. Is VLS a typo; having trouble looking it up.
Thanks for your response to that question and this one.

Q: Hello Peter & 5i team,
So far so good in 2015, even though it was a tough year ; the equities (all canadian) I own have generated a 12.6% total return to Nov 20.
But these equities represent 82% of my RRIF portfolio ; this means that I’m sitting on 18% cash which I hesitate to redeploy.
You say that the US economy is pretty strong ; well, I’m not so sure about that. It is rather the best among a lousy bunch; in other words, in the kingdom of the blind, the one-eyed is king.
The S&P 500 rally is of low quality in terms of lack of breadth ; in 2015, its top 10 performing components represent over 100% of the total whereas that ratio was less than 20% in 2014 and slightly more that 10% in 2013. That’s a bad turn of situation.
The relative performance of the Russell 2000 vs the S&P 500 is in decline due to lack of liquidity in the small cap sector (which is the engine of growth). That’s no good either.
The Retail sector (consumer discretionary), which is a very important sector in the US economy, is dominated by only 3 names : Amazon, Netflix and Expedia. That’s hardly reassuring.
The US$ keeps gaining ground ; that causes enormous pressure on Emerging Markets debt and constitutes a substantial headwind on US multinationals profitability.
To top it all, the 2-year US yield is going up contributing to a flattening of the yield curve ; if (and its a big if) this situation perseveres for a few more months, we could face an economic downturn.
This is my rationale as to why I hesitate to redeploy my cash and look forward to your counter arguments,
Thanks as always,
Antoine

Q: Good morning,

I currently hold SPY, VIG and IWO for US exposure in equal amounts representing 8% of my portfolio. Would you recommend switching to/ or adding to these the specific ETFs that you outlined for tech, consumer discretionary and industrial sectors? Also, what portfolio % might you aim for in US currently.

Thanks.

Q: goodday
In your options strategy i notice that you renew the option or sell another one about once a month. I have heard that others look out to two or three months. I have looked at calm and noticed that on a $60 strike price, you stand to make pretty much the same premium, the feb premium just paying thrr times more than the dec premium. I would like to know if there is any kind of advantage in the once per month option
Thanks

Q: Hi Peter,

This stock was suggested in the Financial Post prior to the health care correction. Would you consider it a hold? I could tax loss sell?

Thanks for the great service. I too recently renewed for two years.

Q: Hi Guys. With all the hype of 5 Star Wars releases in the next 5 years plus the merchandising to go with it. Is Disney priced to perfection at this point or does it have room to move to the upside if it starts smashing worldwide box office records? This is of course in addition to all its other upcoming high profile film releases. Not to mention media properties, parks, cruise ships etc.

Q: Team,

*Please count this as 4 questions*

Can I get your updated opinion on the following 4 US companies, all of which has had recent dips / corrections.

I own an avg. position in each as part of a balanced portfolio, thinking of adding more to each name, do you have a higher degree of confidence in any of these names more than the other? Thanks.

1. UTX
2. CSX
3. MRK
4. PG

Q: May I have your opinion on these two stocks, please. Qualcom was battered today, but has been declining for a while. At&T seems to be solid and competitively priced?
Thanks!

Q: Can you provide an opinion on this stock please and thank you...i understand you don't follow it closely but an independent opinion would be appreciated...cheers

Q: Hi Peter
Have done very well by your CDN stock picks. I know US stocks are not something you specialize in but a question. If I wanted to buy one US conglomerate (not in health care) for long term low risk growth and income what would be your top choices? Much thanks

Q: Given the recent patent infringement issues on top of difficulty in China, what is your take on QCOM? It has a very dominant position in mobile chips, but this seems to be the source of many of its problems. I remember when this happened to Microsoft in the late 1990's. The stock lanuished for years before recovering. MSFT was at a much higher P/E then compared with QCOM today, however. What are the chances of recovery? Would you recommend holding QCOM or taking the hit and selling to look for better opportunities? Any suggestions in the technology space?
Thanks,

Q: Hi guys, I have done very well with the consumer discretionary sector both in Canada & the U.S.A. My problem is that it has grown to 25% of my portfolio (each name is between 3 to 4%). What is your forcast for the sector in 2016 and should I trim now or wait until they reach 6 to 7%. Should you recommend trimming, what sector looks interesting to you to this time.

Thanks,

Jim