Investment Q&A

Q: Hello Peter,
From my understanding, the Canadian Banks typically are considered good value when their PE ratios are under 15. I am noticing that the ratios are getting close to 15 (i.e TD). From a technical standpoint, the RSI is still good (under 70) so am wondering if you would consider the banks approaching full value on fundamentals. I understand there is more to considering full value (ROE values etc), but when the banks approach PE of 15, is it time to reduce the weightings. Thanks for your advice. umed

Q: I hold 6.25% TD.PRK-T preferred shares which will mature on July 31. I have the option of converting them into Series L, non-cumulative, floating rate issue 4.33% + the average previous 90 days T-Bill rate. Can you please advise me if this is a good choice assuming that interest rates may begin to rise in the next 1,2,3 years. Under what market circumstances would the shares drop below the $25.00 PAR value, and would this be a major concern given that inflation is now hovering above 2% and that interest rates will remain at their current levels this year and potentially be on the rise starting sometime in 2015. For a preferred share, can you suggest a better alternative that would provide similar returns but offer a lower risk.

Also is it too speculative to buy ECI now that a takeover offer has been made and even assuming that the takeover does not take place.

Thank you for your advise,

Joseph

Q: According to my G & M watch list, TD has a roughly 34% dividend payout ratio, which seems very comfortable. BMO and BNS, however, both have negative payout ratios of 118 and 134. Does that mean they are making that much more than they pay out? and does itmean they are a better "bang for the buck" than TD? .
I own all three and don't plan to sell any. Just wondering Thanks again for your wonderful service. I can't overemphasize how much I appreciate it.

Q: An observation for TD Waterhouse accounts. Others may follow the same practice.

I noticed that my "Account holdings values" from the market close to the next day's pre-market opening, change. The morning security prices do not reflect the closing price from the previous day's market close. Seems strange as the values reflected the market close and change to something less overnight. The following is TD's response. (they use the last Bid Price)

" TD Direct Investing updates client portfolios on a nightly basis (during floating periods between midnight and 7:30 am eastern Monday-Friday; as late as 11 am eastern on weekends). This late period is chosen because there is less activities on the system that allows the account to be updated over the morning hours in a batch process.

Your holdings are updating using the previous day's <b>closing bid price</b> (or NAVPS in the case of mutual funds). In the case of equities, we do not apply the last trade (or closing) price because the closing bid price reflects a more accurate and realistic picture of what your holdings are worth on the market."

Q: re: Canada's big banks

Seeking Alpha commented today that Moody's lowered Canadian Banks outlook to negative.

"Affirming the ratings of Canada's largest banks, Moody's cuts their outlook from stable to negative, thanks to the government's plans to implement a "bail-in" regime (i.e., creditors to take a haircut) for systemically important lenders."

I have a 5% position in TD and have done quite well with an excellent dividend. Is this something I should be concerned about moving forward?

Thanks for all you do

Gord

Q: Hello Fivei Team

As a relatively new suscriber I have found the site very useful and a fresh perspective.
My question is a round real return bond funds. I have held the TD RR bond fund for several years. Last years talk of tapering and interest rate bump pulled them back pulled them back about 10%. YTD on the same fund is up 8.4% with little inflation although the ten year bond has come down since last year.
Can you explain the correlation here as I have always understood these RR's do well in more inflationary times.

Thanks
Jerry

Q: Further to the question from Terrance this morning, TD is not overbought according to RSI today. It is currently at about 61, really, a pretty good score. This number changes daily and, like any of the other momentum indicators, should not be considered a buy or sell signal in isolation.
I agree with 5i, technical analysis is another tool along with fundamental analysis. But, don't buy anything unless the fundamentals are favourable (that's why I subscrible to i5 Research). And, don't worry about the technicals unless you understand the whole picture.

Q: Was reading where it says TD is entering overbought territory with a RSI value of 73.5,could you explain this

Q: Hi, I am interested in Toronto Dominion's preferred share TD.PR.O. It yields 4.85% & is presently trading above 25$. The prospectus states that after Oct 30, 2014, the bank will only pay 25$ if the bank chooses to redeem the shares. Would you at 5i have any insight as to what might happen to the yield after Oct 30? Does it remain at 4.85% forever. Thanks ... Cal

Q: I read this news headline yesterday: "New York Fed Awards Primary Dealership to Toronto-Dominion". Is this particularly good news for TD?
Thank you.

Q: Hi just wondering what your take is on bank stocks like TD & Ry after today's 3% announcement?
Stu

Q: Is there advantage to buying td before it spilt thank you

Q: Hi,
what's a good amount of $$$ to invest in a stock split like TD?

Do you have an opinion on
1) AXX
2) PPY

Q: I was thinking of buying td on the US side. In a previous Q/A you said the price would adjust. I am not sure I understand this. If the Canadian $ drops to say .90 cents would that not make an increase of 4% or so on the difference in the dollar plus being paid in US dollars in the dividend?
Also what are your thoughts on the dividend stock split?
Thank you for your assistance and clarification.

Q: I currently have no Canadian Banks in my portfolio and am looking for an opportunity to enter the sector. I am wondering with the recent pullback whether this is a good time to buy. I am thinking of splitting my money between two banks, specifically Bank of Nova Scotia and TD Bank. I have at par, uninvested US Dollars. Is there any advantage to buying on the US market or should I buy in Canada? Thank you.

Q: RY v TD

Im going to buy BNS and one other canadian bank, Which do you like more between RY and TD?

Q: Is it a good time to invest in TD Bank at this level?

They forewarned the markets that their quarterly results (coming out tomorrow) will include losses from their insurance business due to the floods in Toronto and Alberta.

Q: near term price of TD common shares and blackbery shares

Q: Do you think TD Bank would be a good addition to get exposure to the US recovery and their banking sector?

Q: I visit your site regularly; it is my main source for investing advice and information. I have a question on financials. I am currently underweight financials (4%) in the form of BNS. I am thinking it is time to consider increasing my weighting. I could add to BNS, which I like for it's global exposure, or diversify by adding TD for exposure to the US. I would appreciate your comments. Thank you.