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Investment Q&A

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

Q: Hello,
May I have your opinion on selling part if my Amaya (3%) and Boyd (7%) positions to purchase Premium Brands. As I am over in consumer discretionary and hold only a 2% posit in Saputo in basics. This would bring basics up to approx. 5% and discretionary down to approx. 16%. I also hold aw.un, bpf.un cgx dhx.b and gsy. In your opinion is there a better rebalancing option?

Your input is much appreciated.
Brian
Read Answer Asked by Brian on September 19, 2016
Q: 2nd try:

Peter, I read your answer to Richard, September 8, 2016, about the slow-and-steady value creators and for the Industrial sector you gave PBH. TMXmoney.com and 5i Coverage summary in their classifications put PBH in Consumer staples (defensive) non-cyclical sector. And now, you have 2 problems: find a favorite for the Industrial and is ATD.B still the one for the Consumer staples sector?

Thanks for all you do for us.
Read Answer Asked by Ray on September 09, 2016
Q: Hello Peter and 5i team,
Our sector percentage in the consumer staples space is a low weighting , having only ATD.B. We would like to add one small cap and one large cap. In the small cap space we like PBH. Is it a good time to enter this sector now and what is your favourite large cap?
thank you as always for your opinion.
Read Answer Asked by john on September 06, 2016
Q: I have 20k in which to invest in a new TFSA what are your thoughts on the following as to dividend growth and safety NFI KEY PBH WPK PLC This is for a long term hold
THKS much
Read Answer Asked by Marcel on August 22, 2016
Q: In a recent member's question regarding a conservative portfolio construction you said that there are good consumer discretionary companies that are growing income and dividends. Which ones in Canada and the US would you recommend other than the auto related ones? Many thanks for the great service.
Read Answer Asked by Derek on August 18, 2016
Q: I have just brought my soaring PBH down by over half and it is still 5% of my portfolio. I know it and L are very different despite being in the same asset category, but will PBH "do" nonetheless without my adding a more traditional grocery store?
Thank you for your help and advice. I am with those who recognize that you do not have a crystal ball, and given the unreliability of crystal balls, it's just as well
Read Answer Asked by M.S. on August 16, 2016
Q: I currently own Amaya and would like to sell and buy either CXR, KBL or PBH. How would you rank these 3 stocks for 2 year total return potential and why.
Read Answer Asked by Sandy on August 09, 2016
Q: A recent negative article in Seeking Alpha by Timberwolf Equity Research raised a few points that I hope you can comment on. The company was not calling for a short on the stock so the article does not appear to be self serving, although that in itself is not much proof. So while the article appears to be based "on facts", it does not agree with your recent review of the company.

The article as best as I can understand it raises 4 points.

1. That Starbucks accounts for 35% of the company's sales (23% of revenue). They acknowledge the company does not state this but that they have figured it out.

2. Inside ownership. and therefore an alignment of management interests with that of other shareholders, is a mirage because the company has provided these particular shareholders with low interest loans that require the value of the stock as collateral and for the dividends to cover the principle repayment costs. Therefore, the company's management has an incentive to raise the dividend whether warranted or not.

3. Cash flow is miss-stated because the company excludes working capital changes as it only includes replacement capital expenditures and leaves out expansion capital expenditures (I won't pretend that I understand this). The upshot is that the company's cash flow is closer to $28 million rather than the $81 million stated by the company.

4. Share count is ever increasing because the company finances its takeovers with low interest convertible debentures which almost assuredly means that the debenture holders convert their holdings into stock. The authors estimate that this resulted in a 22% dilution in 2015.

Appreciate your insight into these matters.

Paul F.
Read Answer Asked by Paul on July 28, 2016
Q: Thank you 5i for your excellent service!!!

I have divided up my portfolio into thirds.
One third is a diverse group of ETFs.
One third is cash and a group fluid group of stocks made up primarily from stocks you recommend. SJ, CCL, SIS, KXS... etc.
One third is made up of the seven stocks listed above. Do you have any concerns about any of these being a long term hold. I know Magna is cyclical but is that a concern?
Cheers,
Bryan
Read Answer Asked by Bryan on July 19, 2016
Q: Sorry for resubmitting the same question again. It seems that I am doing something wrong. Just realized that the name of the Company didn't appear on my last submission, so I am putting the company name and the symbol in the text, (Capstone Mining CSE.PR.A). My original question was sent two days ago, and probably did the same mistake.

I am in dilemma in choosing between the offer to convert series A to a fixed reset for five years at 3.271%, to convert to the floating rate preferred, initial quarterly rate 3.204% or to just take my losses and sell. What would you suggest, how safe is the dividends on this prefered now it is in the hands of the new company that bought Capstone and considering that the rate of return of over 6% based on current price? What would be a good replacement if income requirement isn't important and would rather have some growth and less dividend?

Thanks.
Read Answer Asked by Saad on July 11, 2016
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