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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 am reviewing my 2% holding in PWF and would like your view of a switch over to SLF. Since 2013 I have watched it tread water. It is my main sector holding but is below my cost point. In doing the switch I am taking small loss plus a small drop in div payout, but having reviewed both feel I will be gaining a stronger a company in SLF. Do you think SLF will outperform PWR going forward or is it just best to sit tight. Thank you
Read Answer Asked by James on May 19, 2016
Q: I am a retired, conservative, dividend-income investor with a pension, CPP, and mostly dividend stocks (AD, AQN, ALA, BCE, BNS, CPG, CGX, ECI, FTS, PBH, RY, TRP, WCP, WSP, WEF, ZLB, XIT, Sentry Cdn Inc, RBC Equity Inc, Sentry REIT, Annuities, Fisgard Capital).

I have a roughly 10% weighting in energy. I hold CPG in my Cash account and have a potential capital loss available. Listening to the CEO yesterday, it looks like the dividend will remain small for the foreseeable future.

Two options = sell and replace with a better dividend player, capturing the Loss. Or, continue to hold CPG as this seems to be one of the "go to" names as oil recovers. While I would like more steady income, it is possible if I switch energy names that the new holding would then cut its dividend.

Under consideration are BNE, VET, FRU, SU, CNQ, ZEO, XRE. Are there others that should be on the list? I don't want a small cap and I'd prefer an oil name.

I have tried my usual filtering with P/BV < 2.0, P/CF < 6.0, Div > 3.0% and Beta < 2.5 (not sure if you want to consider beta in this exercise because you want the bounce) and don't get anything that makes sense.

It is normally all about total return, but steady income is more important.

Help and thanks in advance...Steve
Read Answer Asked by Stephen on May 19, 2016
Q: Back in April you recommended SJ, KXS, OTC, and PBH to someone who was starting a TFSA , and all except for SJ have taken off...
I am trying to help a Senior who doesn't even own ONE stock .
I presume in his situation would you recommend the usual SLF, and BNS ?

Now that these stocks have already performed so well , should he wait for a summer pullback on these ?... or are there others that he should consider ?

Thanks so much
Read Answer Asked by Thomas on May 14, 2016
Q: Good morning Team. It is 9:44 Tues morn and both POW and SLF are climbing. I would have thought the opposite. I own approx 1.75% of each. Both are under for me but should I shave or sell one before they begin ???? to drop as I suspect they will??? Also ..may I suggest that all of us and 5i put the day and approx time in the Q and A as often we dont know when a question was asked and sometimes timing is important. Just a thought..Much thanks as always
Read Answer Asked by El-ann on May 11, 2016
Q: Hi Team ... I am up nicely on BNS and will be selling some in order to maintain a proper weighting within my portfolio. I'd like to redeploy the proceeds within the sector and am looking for a company offering a nice yield as well as good growth potential. I'm leaning towards Fiera Capital (FSZ) and would appreciate your thoughts. Also, any other candidates I could be considering?
Read Answer Asked by Richard on May 03, 2016
Q: Good Morning
I hold 4 Canadian banks CM, TD, RY and BNS in an unregistered account. The bank stocks comprise just under 20% of my portfolio and each has approximately a 50% capital gain. My only other financial stock is a 2.5% position in PWF. Capital gains in my account this year will likely be taxed at 15%. I am considering selling one of the bank stocks (perhaps CM) and investing the proceeds in SLF. I have chosen SLF for it's relatively low valuation and secure dividend.
Is reducing the allocation to Canadian banks appropriate, or does the tax which has to be paid cancel the benefit?
Which bank would you sell?
Is SLF a suitable alternative or is there another company that you would prefer. I already have full positions in CNR and BAM.A.
Thanks
David
Read Answer Asked by David on April 25, 2016
Q: I am a conservative, retired dividend-income investor with a pension and CPP. My portfolio includes AD, AQN, ALA, BCE, BNS, CGX, CPG, RY, SLF, WSP, WCP, WEF, ZLB, XIT, Sentry Cdn Income Fund, Sentry REIT, RBC Eqty Inc, TD Health, Annuities and Fisgard Capital.

My question is regarding SLF. I bought it in the fall of 2014 with the investment thesis being rising interest rates and an improving equity market (both supposedly good for lifecos).

I am basically flat (down from cap loss and up from dividends). I am normally almost fully invested and am not a trader. I'm happy to hold SLF, but I think the original investment thesis has now changed. Is SLF dead money for now and is the current environment likely to produce more share price deterioration?

On a side note, I am slightly overweight in financials.

Thanks, Steve
Read Answer Asked by Stephen on January 13, 2016
Q: Hi 5i,

There are a couple of things I don't understand about this recent rally.

It seems to me that it is due to the US potentially slowing down, and hence delaying interest rate increases. If this is true, are we to expect this rally to end soon (since a slower US economy must eventually be bad for stocks) or does this rally have legs?

Also, if the rally is based on delaying interest rate increases why are companies like SunLife rallying. I thought these companies were going to benefit from rate increases so the current environment should be negative for them?

Any help you can give me to clear up my confusion would be appreciated.


Thanks,
Read Answer Asked by Mark on October 07, 2015
Q: Hi Peter and Team, looking for clarification regarding your ten picks for Greg in the current selloff, regarding Sunlife as a pick, wouldn't SLF which has a growing presence in Asia, with net income and operating net income in the region more than doubled, become an issue due to China currency affect?

They had a great quarter but how will SLF's international businesses be affected going forward, especially considering the Asian currency issues?

Thanks!
Read Answer Asked by Hussein on August 24, 2015
Q: I would like to increase my exposure in a life insurance company. I currently own Sun Life (3%) in a well balanced portfolio which includes US exposure and I am wondering if I should buy more SLF or go south of the border and pick up some AIG. My thinking is that interest rates are set to rise in the US, which is usually good for lifecos while Canadian rates are still lagging.

I realize that some of the interest rate increase is already priced into AIG as it has done will for the past year. But is seems to me that as much as things are "priced in" there is still a reaction when the event itself finally occurs and there will be a lag to earnings until the higher rates actually hit the bottom line.

Do you feel AIG presents a better long term upside or should I stick with SLF?

Thanks for the insight.

Paul F.
Read Answer Asked by Paul on August 17, 2015
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