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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: I already have ENGH, KBL, TCN, AW.UN, CCL.B, CXI and HAC in my TFSA together with about 40% bonds. Can you suggest any of the Canadian stocks you cover which would be most suitable to add here? I guess for a TFSA capital appreciation is paramount.
Read Answer Asked by Andrew on March 27, 2017
Q: Hi. Since joining your service I have slowly sold my mutual funds and built up the portfolio listed. I have an equal percentage of these listed except M at 16% AVO at 1.6% and SGY at .6 %. I have a mutual fund left at 6% that I would like to sell. For a balanced portfolio today what would you recommend I purchase? 3 - 5 year timeframe. Please deduct appropriate credits for the long question. Thanks.
Read Answer Asked by John on March 15, 2017
Q: I would like to buy a royalty income fund . Could you rank these for me. AW.UN,BPF.UN,PZA.UN AND KEG.UN
Read Answer Asked by Bruce on March 06, 2017
Q: Please dock two questions for this:

1. Would EIF be best held in a TFSA or non-registered account?
2. What would you recommend for a high divdiend paying stock in the consumer space for a non-registered account. Would BPF.UN be a good choice?
Read Answer Asked by Carla on February 28, 2017
Q: Good day,
Perhaps I need to be clearer in what I'm asking with regard to the secondary offering announced by A&W. From your earlier answers this is a non-news story that has zero affect on the company and its stock value and does not even really involve the company so much as certain shareholders selling their stock to someone else. So why did A&W announce it? The market seems to think this was a significant event, as the stock has fallen precipitously since the announcement.
Read Answer Asked by John on February 21, 2017
Q: Would you please clarify your answer to Chris. It looks like A&W is offering up new shares for sale. This dilutes the value of existing shares. But the money from the sale of those shares is going to 'indirect shareholders' (the people who own Food Services) rather than to something like reducing debt for A&W or doing something else that will eventually improve shareholder value.
Read Answer Asked by John on February 19, 2017
Q: A&W issued a release regarding a private placement this morning which itself isn't out of the ordinary.

However what caught my eye was what will happen with the proceeds. They will be given to 'certain indirect shareholders' for 'their personal financial planning requirements'. So the fund is selling units to Laurentian, and all of the money is being handed out to unknown shareholders. None of the funds will be distributed to other shareholders, nor will the Fund hold the cash.

I'm no expert but this doesn't pass the smell test. Am I missing something?
Read Answer Asked by Chris on February 17, 2017
Q: Could you comment on the private placement, is this why the shares are down ~$1 this morning? will this put a ceiling on the share price until the placement closes?

'VANCOUVER, Feb. 17, 2017 /CNW/ - A&W Food Services of Canada Inc. ("Food Services") announced today that it has entered into an agreement with Laurentian Bank Securities Inc. ("LBS") to complete a secondary offering of 373,300 units of A&W Revenue Royalties Income Fund (the "Fund") (TSX: AW.UN) in a private placement on a bought deal basis. Under the agreement, LBS has agreed to purchase 373,300 units of the Fund (the "Units") from Food Services at a price of $39.25 per Unit, for gross proceeds of $14,652,025. The transaction is expected to close on or about February 28, 2017, but not later than March 8, 2017.'
Read Answer Asked by Kuldar on February 17, 2017
Q: Hi guys,

I have held a position in AW.UN for a long time and it represents about 3% of my portfolio. CIBC's Investors Edge shows 2015 eps at $1.56. If I estimate 2017 eps to be $1.76, that gives A&W a 2017 p/e of 23.4

It seems like Pizza Pizza (PZA), Boston Pizza (BPF.UN) and Cara Operations (CARA) all trade significantly cheaper than A&W on a 2017 p/e basis.

Against this backdrop, would you sell AW.UN for any of PZA, BPF.UN, or CARA?

Lastly, does A&W's corporate structure make itself less likely to be taken over?

Thanks for your time and expertise.

John
Read Answer Asked by john on February 14, 2017
Q: I am assuming that the rise in AW can be attributed to their new initiative to get younger entrepreneurs to buy franchises. Seems like a good idea but I am wondering what risk the company (i.e. the Royalty Income fund) is taking on given that the new franchise owners are in effect being subsidized by not having to pay for leasehold improvements, although rent will recoup those costs. From your past remarks, you have noted that the Fund has few real expenses so who pays for these improvements and does the new program add any new risk to the dividend or earnings?


Appreciate your insight.

Paul F.
Read Answer Asked by Paul on February 10, 2017
Q: Canadian restaurant income trusts were marvelous investments last year. A&W was up over 40% in the last year in addition to a healthy dividend. The others were up between 26%-33%. Do you expect this kind of growth to continue in 2017? If not, what would be more reasonable to expect?
Read Answer Asked by John on January 12, 2017
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