Investment Q&A

Q: Most equity investments I make are made with a long term view (buy and hold). My recent readings of investment material have concluded in many cases that one of the best indicators of long term successful and rewarding investing is to invest in excellent company management. I would consider some examples of excellent management would be JNJ and closer to home BAM. Both of which I currently own.

Given the great many risks (domestically and internationally) currently threatening even a conservative approach to investing. I am looking to identify up to 10 large companies that have clearly demonstrated excellent consistent management capability. Your consideration in helping me with this by identifying some qualifying companies would be most appreciated. My thought is that at least 5 out of 10 would be Canadian and would be large companies.

Thank you

Q: Thanks 5i for your unbiased insights and for introducing me to many new Canadian growth stocks that I had been unaware of.

Question on Constellation. CSU seems to have some conflicting attributes for a typical tech stock. It trades at a very high PE ratio, 58, yet a low beta of 0.53. Can you explain why this stock trades at such a high valuation with such low volatility?

Q: Hello 5iR Team, Many brokerage houses have developed the portfolio structure of identifying a short list of their "Highest Conviction" stock picks. Then they separate them from all of their other "BUY" rated stocks and/or stocks they have selected to put in a portfolio.
Yes, I know you have your three model portfolios but choosing a few stocks from these portfolios or something different forces everyone to concentrate and co-operate to develop the ultimate 5iR focus list.
Is this a concept the 5iR team has considered?
Would it be possible to ask at this time can the team give me what 5iR thinks are its' Highest Conviction ideas for 2019? Thanks Team. Cheers, Chris

Q: Good Morning 5i,

Looking for a bit of guidance in adding to my CDN portfolio. Bit of a long-winded question so please deduct credits as appropriate.

I have 27 positions. The smallest positions are at about 2.75% (FTS, NTR) and largest are at about 6.5% (ENB, BNS).

Sector Allocations as follows:
Financial - 20%, Energy - 20% (almost entirely midstreams/pipes - ENB, KEY, IPL - Vermilion is the exception), Industrials - 12%, Materials 5.5%, Cons. Cyc - 7%, Cons. Defensive - 3%, Telco - 8.5%, Utilities 14%, Healthcare - 4%, Info Tech - 5.5%

Holdings are almost all 'boring' names, dividend payers/growers even though my risk tolerance is high and we are in our late 30's with no intention of touching this portfolio for decades. There are a few growthier co.'s in there that have come from your suggestions - GC, KXS, SIS, for example.

We have funds for 3 new positions - 2 in cash account, and 1 in a TFSA after contributing this year's limit, each position worth roughly 3.5%

I've been leaning towards BAM, as an all around well run company and exposure in things like real estate and infrastructure that is currently not in this portfolio.

Can't settle in on the other 2 positions, although my sector allocations scream at me to add more Technology. I simply cannot figure out what would be good buys here - I keep going back and forth in my head between growth options (PHO) and more boring options like Evertz.

Can you give me your opinion on this? First of all on whether (based on my current allocations) I should be looking at tech or somewhere else. Second, on the specific names to recommend (given a timeline measured in decades). Third, on the addition of BAM? Finally, on where you would add the positions (TFSA or CASH)?

Again, multiple part question so please deduct as appropriate.

Thank you so much,
Ryan

Q: Hi team,
I did a fast calculation and my tech weighting is at 31%, broad etf's at 29% and the crumbs that are left over in energy, consumer dis. industrial, communication and health.
From the tech sector my highest weighing is SHOP at 5.04% all the way down to PHO at 1.88%

Although CYBR.B is an etf, I lump it in the tech sector. If you had to remove one or two to lessen the weighting which stock would you sell. I really like all those stocks but I am also aware need to up the other sectors.

Thank you

Q: What do you think about buying some shares of CSU now, or is it too late? Or wait for a better entry, in that case what is a better entry point?
Margita

Q: I hold CSU,DSG,ENGH is a non registered account and have done well. OTEX and KXS in a TFSA. In total all of the above are about 6.47% of my holdings. Should I consider reducing to 2 or 3 holdings or hold all five. Comments, thanks

Q: MoneySense magazine just published this article listing 50 stocks. What is your opinion about these? Which would be your highest conviction recommendations, perhaps in different categories, such as income, growth, balanced? https://www.moneysense.ca/save/investing/stocks/50-top-canadian-stock-picks-for-2019-as-chosen-by-the-pros/

Q: Hello 5I
Which one would you like best going forward as I’m looking to reduce my Tech holding to approximately 10%?
Thanks

Sylvain

Q: I’m looking to add a 3 positions to this list. I was thinking about bns or slf. Can you give me some other suggestions from the balanced portfolio? This account is 20% of my total investments, and is for medium to long term savings. The rest is in well diversified funds. Thanks.

Q: Hello there ,
Do you think Mark Leonard of CSU has ever thought of selling CSU and starting again? As Constellation gets larger and larger one would think their growth rate will slow. It might be a challenge to have the same success in the next 10 years as he has had in the last 10 years. I know he has identified tens of thousands of potential takeover targets, do you think it makes sense to sell CSU and start CSU part 2? A new company could be valued back at $25/share and one would think he could double to $50 quickly and again to $100 starting from scratch quicker than $1000 to $2000? So many more deals need to be made now and much larger deals potentially to move the needle. Thoughts?
Thank-you

Q: I have one third position in SQ and two third position in CSU. I need to choose one.
Which would you choose.
Clayton

Q: My daughter TFSA contains the above stocks. She can add 1 (full position) or 2 (half position) this year. What would be a good fit for her present holdings? Would you suggest selling Stella Jones &/or Telus and replacing it with something else? She has a long time frame as she will not need the money in the foreseeable future.

Q: I would like to add another tech stock or ETF to my portfolio.I have 10% total in KXS,MSFT, & AAPL. I have been looking at SYZ,ENGH, CSU and Intel.I would like to know which of these stocks held up well during the recent correction.
Thank you for your invaluable service.

Q: Hi Gang,
Have some cash available and would like to know your thoughts on the above, looking buy 3 or 4 of the above.

Thanks
Anthony

Q: In order to re-balance my portfolio, I need to sell one or more of the following companies:
BEP.un (full position)
CSH.un (full position)
SLF (full position)
NWH.un (full position)
SIS (half position)
CWW (half position)
CSU (half position)
KXS (half position)
Which one(s) would you suggest I sell?

Q: Happy NEW YEAR Peter &RYAN
Hypotheticaly would CSU make a take over bid for SHOP and if so; would the bid have to be in excess of 30% of SHOP'S last price for SHOP to accept .
Thanks Gary

Q: To date, I have not moved out of RHT yet. It only makes up 1.09% of my overall portfolio. Do you see any sense in holding it?
If not, what are your replacement recommendations for the technology sector? Do you still see CSU as an option?

Many thanks.

Q: Would you buy constellation or kinaxis ? Or share the allocation 50 / 50 between the 2 ? Buy and hold for 10 yrs. Can you please also explain why ?

I have owned Descartes for a few years and did well.... tks to you ! Is it a good time to add ? Or should i just buy more of constellation or kinaxis ? Thank you for your comments and happy holidays to the team !

Q: Hello, 5i
Sometimes entry price counts....
I have followed CSU over a few months now.
I know that you are very reluctant talking prices makes this question probably frustrating
So this is my question:
/Which of csu or engh do you prefer?
If you prefer csu,
1/ do you think it is over/under or properly valued at $886
2/ in case of a economy/ markets breakdown, from your experience, can it drop another 20%
Thanks