Investment Q&A

Q: Hi Peter & 5i: Just a comment on Mark’s question about whether REITs should be held in RSPs. In my view it depends on (1) which REITs you are talking about and (2) an evaluation of all of your accounts and holdings. The second part is just that the question of where you hold something for tax reasons can really only be evaluated against what your alternative holdings arrangements might be. So it takes into account what the REIT might displace if you were to hold it in a particular account and what might be the costs and tax consequences of the whole shebang. The “which REIT” question takes account of how the REITs themselves designate the money they are distributing. Some REITs (like Artis, AX.UN, for example) have designated nearly all of their distributions as Return of Capital (ROC) for many years. This effectively means that instead of paying distributions that would be fully taxed as equivalent to interest income, the designation lets you have the money with no immediate tax consequences but instead reduces your adjusted cost base (i.e. the book value of the holding in your account) by an amount equivalent to the payments designated ROC. The effect is that the ROC designation converts that income into an unrealized capital gain that will defer the taxation until you sell the units. So you get the benefit of having access to the untaxed capital distribution until you sell. Then when you do sell, the gain is taxed at the capital gains rate (1/2 of your top marginal rate at the time). This is a potential advantage to the unit holder, which would be lost if the units were held in an RSP. Inside the RSP you would get the tax deferral benefit on both the income and any gain on a sale of the units. But then once you get to the point where you are taking the money out of the RSP it all gets taxed as regular income. With REITs whose trust distributions are designated as “interest income” or “other income,” just like bonds these attract your highest tax rates anyway, so you don’t lose a lower tax rate opportunity by holding them in an RSP, and you’d would likely do better on them in the RSP if the presumption holds true that in retirement, when you are expecting to draw on the RSP, you will likely be paying lower tax rates because you’ll have less income than you do when you are working. You can find out about most REITs’ tax designations on previous years’ distributions by looking through the investor information on their websites. It isn’t a guarantee they’ll do it exactly the same way in each subsequent year but is a pretty decent indicator of what they may do. Hope that’s useful!

Q: Hi,
Automatic Data Processing Inc NASDAQ:ADP -Your assessment please on ADP as a long term holding - mostly as for it's dividend. It appears to be a consistent dividend grower, but are there other US stocks that you would recommend ahead of ADP for a combination of growth and dividend growth/performance. A Report at TD by Thomson Reuters has recommendations varying from Sell to Strong Buy?
Thank you.

Q: Hi Team, What are your thoughts on Neptune's (NTB) results.

Q: I would appreciate your opinion on VSN Veresen as to growth,
management and do you feel the dividend is sustainable?
Thank You for all the great information.

Q: Hello, your last comment regarding MRC indicated an investor presentation earlier this month. Was anything gleaned from same. It is priced today at .8/book so is very cheap. I am thinking of buying for capital appreciation. Is it presently a buy? Thank you, Bill Y

Q: What are your thoughts about the Canadian dollar vs the US dollar?

Q: should i continue to hold these stocks gps cmi cxs avo

thanks donald

Q: Hi Peter and Ryan

Re: BOX.UN

My understanding is that this company represents the non-controlling interest of the former BPO (Brookfield Office Properties) acquired by BPY. That said, it would seem that BPY would be very much interested in consolidating the office properties portfolio into one company by taking out the BOX.UN shares especially since there appear to be only 26M shares outstanding.

BOX.UN appears to have investment merits on its own given the quality of assets and that it is under the Brookfield umbrella but do you think any attempt to acquire the outstanding shares of BOX.UN by BPY would be undertaken at much of a premium to market?

Thank you

Q: Could you please give an update on sis. Is this a good entry point. Many thanks, Nancy

Q: I would appreciate your comments on the new Canexus Convertible Debenture. Interest at 6.5% is attractive as long as the company still has a viable future.

Q: What do you think of Patient Home Monitoring's (PHM) recent quarterly results. They appear to be growing earning on a per share basis despite the share diltuion/aquisition model. Do you think it is now trading at a reasonable valuation to enter the stock, or still to expensive?

Q: Any insight on Journey Energy- potential IPO.

Q: What are your thought on NEXFLIX(NFLX).I did read the previous comments made but it has been a while since anyone has asked. They are looking to expand in Europe now. I know it is a very risky stock but you think the reward is worth the risk?
Thanks

Q: hi 5i,
my question is regarding Petromanas Energy Inc (PMI-V). i know this stock is very speculative but
just recently the dynamics of the company has changed.can you look at it again and give an opinion ? i took a position a few weeks ago and i'm thinking of adding . what do you like/ dislike about the situation. is management competent ? i know these wells are extremely expensive but Haywood is saying that at current stock prices the downside is limited. thanx norm

Q: Hello Peter & Co.
I hold Westshore Terminals WTE since April 2010 and have doubled my capital since then + another 25% in distributions. I keep holding it because it has an unbelievable, hard to replace, infrastructure asset. Besides, I feel it is going to be very hard to add another terminal like that on the West Coast.
Your opinion is most valued
Tony

Q: What are your thoughts on the The Intertain Group (TSX:IT)? The upside looks to be tremendous. If the company in my opinion gets back to the 2011 numbers, this stock could triple?

Q: Is CF a good entry point now?Note that 1)releasing results on June 3--Any surprises? & 2)Co.has not declared NCIB buy back since last purchase of 31k shares in the low $8 range.Your normal expert opinion is appreciated

Q: what do you think of the banks right now is this a good time to buy for a long time hold. What bank do you prefer. thanks

Q: Extendicare should see some catalyst soon as their review should unlock some value ?

SCP and MAR are both trading well below NAV, do these interest you ?

Q: I would appreciate your outlook for Brookfield Property Partners (BPY.UN)

Thanks