Investment Q&A

Q: I have held ccl.b and nfi for a number of years and done well, although the last few years have been disappointing. I have just sold my positions in these two companies and am considering cae and tfii as replacements. Your thoughts?
Does Cae’s recent decision to lay people off and cancel its dividend raise concerns or reaffirm its strong management and strengthen its eventual recovery?
Is tfii’s balance sheet strong enough to get through this crisis and given the need to deliver inventory by trucks provide rational for strength during the short term as well as once recovery takes hold?
I have a diversified portfolio which is fairly well balanced by sector and reflects your balanced and income portfolios with a smattering of stocks from your growth portfolio.

Q: Further to Chris M.'s note on insider buying at NFI, it should be noted that Mr, Gray also purchased $35 million of NFI stock in August 2019.

Paul F.

Q: Based on the following from G&M today, and my horizon of 5+ years, can I have your opinion on continuing to hold:

"NFI Group Inc. (NFI-T)

On March 25, Adam Gray, who sits on the board of directors, invested over $10-million in shares of this company. He acquired 1-million shares at a price per share of $10.85 for an account in which he has control or direction over (Coliseum Capital Management LLC), raising this account’s holdings to 3,206,246 shares.

On March 25, director and the company’s former president and chief executive officer John Marinucci invested over $105,000 in shares of NFI. He bought 10,000 shares at a cost per share of $10.51, lifting this account’s position to 145,500 shares."

Thx
Chris M

Q: It seems that if a company had a backlog of orders, it was an asset....however in the current mkt these backlogs are now a major liability as orders begin to evaporate, the future earnings and valuations of these types of companies gets hammered until a new batch of orders reappears which with today's environment is pushing far beyond the horizon. CAE and NFI come to mind. your thoughts please..

Q: Hi Peter and Team,

I'm wondering if it's time to start picking away at names like New Flyer? I thinking that they are building public transportation and Electric Buses which should still be desired following return to normalcy from this virus and may be more desired following the recent big drop in air pollution from the economies shutting down.

Q: The above TFSA holdings have not performed well and of course, are not eligible as tax loss harvesting. This is one of the potential downsides of TFSA investments. Please give me your thoughts on which ones you would move on from and without worrying about sectors, some replacements you think will recover well. Thanks again for your guidance.

Q: Hi, Had the misfortune yesterday of buying NFI just hours before they announced the dividend cut and closure of plants for 2 week. Ouch.

Any views on the company? Any risks that they won't recover? My thesis was that they were in good shape with their order backlog and large public sector customer base...

Q: Both of these are down significantly today. NFI had a press release. This was viewed as negative by the market, but to me it seems the company is reducing risk. No idea why TCN is down again, it is selling for less than half book value. Any risk of these companies going bankrupt? They both seem to be incredible buys at these prices. Your views, please.

Q: Hi 5i Research Team:

I have traded Forex before and am new to stock trading. 90% of my RRSP, RESP and TFSA is in cash and I'd like to avail the current market conditions by "gradually" buying the dips.. and holding it over the long term, 5 to 10 years. I understand that no one can time the market or its bottom.

After exploring the reports and questions on your site, I have identified the enclosed 29 stocks based on following criteria:
- Current Retracements of > 75% over 52 week high & low
- Dividend Yield > 5% (in some cases, like WEED, which is a bit risky, I understand there's no dividend in the near term.. and I am simply going for the upside swing over the next 2 years... same for CRON and Air Canada)

Considering my 90% cash position and strategy to partially buy in on dips over the next few weeks, can you please advise if my stock selection is sound. In addition to my stock picks, please advise anything else that I should keep in mind.

Thanks for everything you do. Much appreciate.

Q: If I were to average down on these stocks which would you buy first and are there any in which you would not buy at this time. Could ECN go under if things don't improve over the next 6 months. Thank you.

Q: Can I please get your opinion on the above stocks? Would you consider these bargains at these prices if one is expecting this turbulence not be last longer than one quarter? How sustainable do you view their dividends if we enter a brief recession? I'm wondering whether to get greedy while others are fearful.

Thanks for the great service!

Q: Are there any companies out there now with an 8% or higher dividend that you would suggest for a long term hold? I say 8, bc it hasn’t been overly hard to find 4-5 before this carnage. I picked up ENB already, and I’m ok if the short/med term div is cut and the price falls further. I’m really looking for stocks that will likely pay a high stable dividend into the future (based on current prices) after things return to normal. No preference on sector.

Q: Hi 5i,

Thank you for the great insight during this challenging time. Can I please ask your opinion on these five existing positions? Each is sitting at a substantial loss and trying to decide whether to sell, hold, or with a Canadian recession on the near horizon:
-Parkland Fuel
-New Flyer
-Cymbria
-Western Forest Products
-Savaria

Thank you in advance. Please use credits as needed.

G

Q: Their just posted numbers look like a solid beat to me...do you agree? The stock is down about 17% as I write this question so it appears the future outlook is negative due to Covid-19 worries both real and imagined. Still a hold in your opinion?
Thanks,
Jim

Q: If NFI is already owned but would like to increase the number of shares would you rate this stock as a buy or hold or sell?
Thanks

Q: Can you talk about the fundamentals of these companies that are part of your Balanced portfolio? From a technical perspective they have been going the wrong direction for quite some time. Thanks.

Q: Two questions: i) You have previously voiced concerns with respect to NFI production control issues and ii) there appear to have been several additional contract awards to NFI in recent weeks. Do you consider the production issues have now been addressed and no longer a concern and, do the additional/cumulative contract awards represent a significant improvement in this company's outlook and is this a decisive move by purchasers of mass transit vehicles? I appreciate there is unlikely to be a short term profit bump but if there has been a productive move or change in purchasing trends do you expect the benefits will mostly accrue to this company and in the longer term. Thank you for your response.

Q: As a retired investor, I am keen on stocks with low betas, high dividends and some growth. AQN, NPI and BEP all meet these criteria and are all up significantly, riding on a crest of green sentiment. These three stocks now compromise 13.5% of my total portfolio. I am loathe to part with my green energy stocks as they are doing so well. That said, have I put too many eggs in one basket? At what percent should I cap my green energy investment? Other than higher interest rates, what could impact continued growth in this sector?

On a related note, I am now overweight in utilities, which now represent 21% of my total portfolio. This includes the three above-mentioned stocks, plus Fortis and BEP. Would you suggest reducing this weighting? And if so, which stock(s )would you be inclined to sell?

Thank you.

Q: Hi,

Waiting on the 30 day period to release-purchase NFI after recording a tax loss. Purchased REAL with the funds from NFI. So far the rise in SP in NFI has equaled the rise in REAL.

Based on the aforementioned, would you sell REAL in order to repurchase NFI, or just keep REAL, based on current fundamentals, without regard to weightings by sector?

Q: Investing in companies that are directly involved in the climate change space seems to be a big investment growth theme and that may explain the good performance of these stocks over the last while. New Flyer is included because of their electric bus component. Successful companies ought to see growing valuations.