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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: Hi, Banks have been decimated over past 3-4 days, perhaps, over the risk seen with an inverting yield curve. A guest on BNN explained that banks make money by borrowing through short term and lending for long term. Short and Long term interest rates spread, contracting to its lowest point, over past couple of weeks, it has caused some anxiety among investors, while, generally market has favored financials due to expectations of rising rates, resulting in higher profits. Do you subscribe to this thesis of inverting yield curve and like that Portfolio Manager, on BNN, is it time to consider reducing exposure to financials ? I would appreciate your comments on this theory and if any action is warranted. Thanks so much
Read Answer Asked by rajeev on April 04, 2022
Q: When Canadian housing prices were much lower than today several years ago there was much talk about American investors being short our banks due to being overextended on mortgages, something I have not heard recently. How much is the short position on them now vs. then and which banks have the most exposure to defaults on mortgages presently?
Read Answer Asked by Jeff on April 01, 2022
Q: Hello 5i Team

I need to trim back my holdings of TD Bank and potentially purchase shares in Bank of Montreal.

If I sell TD Bank on Thursday April 07, please confirm that I will receive the dividend as April 07 is the ex-dividend date.

As the Federal Budget is scheduled for release after close of the markets on April 07, would it be reasonable to assume if an increase in the Capital Gains exclusion rate was implemented it would be effective April 08 or at a later date?

I tried to research the previous increases in the Capital Gains exclusion rates, however it last occurred in 1987 and most government press releases are not digitized from that era.

Thanks
Read Answer Asked by Stephen on April 01, 2022
Q: In your view, what impact will the Liberal/NDP cash grab on the Canadian Banks have on their stock prices. Each of them are expanding outside Canada....does this help mitigate any new tax? Is there one Bank that is better able to handle things and more favored now as a result? Would you just begin exiting the Banks? Thank you for your insight.
Read Answer Asked by Curtis on March 22, 2022
Q: Hi 5i Team - Could you provide two or three top picks in each of the following sectors: Real Estate, Consumer Staples, Financial, Industrial. Any market cap is fine but with a focus on mid cap. Also with a focus on Canadian Equities.
Thanks.
Read Answer Asked by Rob on February 23, 2022
Q: Hi,
In Dec 2021, BMO announced to acquire Bank of West from BNP Paribas for US$16.3-bil. This is a big amount. Normally companies finance these kind of huge acquisition by issuing debt and equity. Whenever new equity is being issued, stock price of issuing company falls during that time. Do you think BMO will issue new equity? Is there any place where someone can get information these kind of news?
Thanks
Piyush
Read Answer Asked by Piyush on February 18, 2022
Q: Hi group - I am a medium risk investor - Can you please give me your top picks + % weighting in the top sectors - Financial, Industrials, Materials , Energy, Health care , real estate, Tech Thanks
Read Answer Asked by Terence on February 14, 2022
Q: Recently Veritas’ D.Souza cut most of the big canadian banks to sell. Could I have forward P/E for each of them? I doubt it, but do you agree with M. D’Souza that the banks are a bit overpriced looking at 2023?
Thanks

Read Answer Asked by Denise on February 14, 2022
Q: I'm interested to increase my sector weight to financials - and now have BMO,
BAM, MA, and FFH.
Please comment on this mix and whether to add to any of these or add other stocks.
Read Answer Asked by Valerie on January 18, 2022
Q: Banks had another big run in January. Are prices already reflecting all the good news for the banks, namely higher interest rates and a good economy?
Secondly if someone had new cash looking for a home in big cap blue chip dividend paying companies which of the financial, pipelines, telecom and real estate sectors give the best upside from here?
Thank-you.
Read Answer Asked by Albert on January 17, 2022
Q: I am considering add more bank stocks and here's what I got based on their P/E:

TD:12.36x
RY:11.99x
BMO:11.69x
BNS:11.50x
CM:10.57x
NA: 10.79x

I have 150K cash available. Would you agree to add National Bank, CIBC and Bank of Novia Scotia equally since these 3 have the cheapest valuation?

Thanks,
Read Answer Asked by Yang on December 24, 2021
Q: Hi 5i
Regarding your answer to my previous question regarding BMO deal to buy Bank of the West, it was not clear if you would be buyers of BMO at the current price or better to wait. Share price continues its slide this morning.

If better to wait, then at what price would you be interested.

Thx
Jim
Read Answer Asked by jim on December 21, 2021
Q: Hi Team,

I only own bank of Nova Scotia and look to add more weight on financial sector. Can you please make top two of your picks in the list of names?

Thank you,
Read Answer Asked by Yang on December 17, 2021
Q: Good Day 5i, Thanks for all the great insights. I enjoying reading them daily.
My portfolio is not well-diversified. I am 39% invested in BMO. Luckily, I have done well over the last 20 years and get about 4.8 % in dividend yield. Everyday I think about trimming but I have not got the heart to do so.

I would like to trim and diversify into other stocks (CAD/US) or ETFs that have potential to grow faster or counter balance a downturn in financial. I do not mind a lower yield.

Which stocks/ETFs would you recommend today if I could trim 10-15% off my investment in BMO.

Thank you and await your highly respected opinion.
Read Answer Asked by S on December 17, 2021
Q: Hi 5i,
BMO had a nice run up in share price last couple of days and today has fallen and I was wondering if this could be negative reaction to this latest news:
"Canada's Bank of Montreal has expressed interest in buying French bank BNP Paribas SA's U.S. banking unit,"

Is this considered positive or negative and why?
Would this influence your decision to add or start new position?

Thx
Jim
Read Answer Asked by jim on December 17, 2021
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