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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: Greetings 5i,

I like VET. I think there is value here for the patient.

Can you please explain Vermilion's current HEDGE obligations. With oil prices recently higher than the current did they manage to get locked in to reasonable prices?

Secondly, on the company website it mentions a Sustanability transition and a geothermal project coming to fruition this fall. Will VET no longer be a O&G producer in the future? What are your thoughts on this.

Cheers!
Read Answer Asked by Duane on August 25, 2021
Q: Hello 5i,
Today (Aug. 25) Ross Healy mentioned that GSY is rapidly approaching both a Fundamental and a Technical inflection point at somewhere around $205.00 +/-.
As a conservative, dividend -oriented investor, GSY is almost at a 5.50% Portfolio Weighting as per P/A. I would like to reduce to around 4.0% but was thinking of holding off until it reaches the 6.0% threshold which would mean holding out for around $225.00+/-. So, my question is: in your considered opinion should I just proceed and re-balance now, or try and hold out for 6.0%?
This is in my TFSA and there are no tax implications nor are there any compelling time-frame issues so waiting is not really an issue other than opportunity cost regarding the re-deployment of the proceeds.
Many thanks for any insight you can provide.
Cheers,
Mike

Read Answer Asked by Mike on August 25, 2021
Q: Hi 5i team,

I am considering using DLR and DLR.U to buy USD and avoid the higher fees the bank charges to convert CAD to USD. But is it worth the hassle in a non-registered account because you might have a capital gain (or loss) to declare when you file your tax return the following year?

Here is an example. If I were to buy US$10,000 today my bank would charge me C$12,756. 1 CAD = 0.7839 USD

If I buy 1000 shares of DLR @ C$12.69 (plus $9.95 commission) that would cost me C$12,699.95. Five minutes later I sell 1000 shares of DLR.U at US$10.07 (plus US$9.95 commission). The proceeds of disposition would be US$10,060.95.

So US$10,000 using DLR/DLR.U would equate to C$12,624.14. That saves me C$131.86 [12,756 – 12,624.14] compared to buying it directly using the bank’s exchange rate. That is about a 1% savings.

But because this is done in a non-registered account I would have to declare the sale of DLR.U when I file next year’s tax return. From what I know you can use the “average” exchange rate for that year as per CRA, or the exact rate on the day of the transaction. So if I use the exact rate (I am guessing it would be 0.7839 as that is what the bank would charge me) I would have a capital gain of approximately C$131 to declare and then have to pay tax on that gain. At 50% tax bracket, the tax would be ~$33. So the net savings are now ~C$98. Final savings are 0.78% of the transaction. If I use the CRA’s “average” exchange rate for 2021 I could have a gain or a loss depending on what that rate is.

I can see this works fine if you do this in a registered account like an RRSP as you don’t have to declare the gain on the currency exchange, but in a non-registered account this seems like a lot of effort for small savings, at least for US$10K. Perhaps it is worth the hassle if you are converting a much large amount like US$50K, or US$100K.

Am I missing something in my example?

Paul
Read Answer Asked by Paul on August 25, 2021
Q: I really like their renewable, clean natural gas technology and I’m wondering if they are worth a 5 year investment?

Reading your past comments it looks like strong insider support but there remains a lot of risk.

I am okay with educated risk. Would you be an investor today or could you recommend a better option ?

Thanks for the great site
Read Answer Asked by Jeffery on August 25, 2021
Q: KXS is on quite a terror lately. Any reasons why?
Read Answer Asked by frank on August 25, 2021
Q: Do you think that the other Canadian banks will follow NA's zero commission? If yes, does this mean they would profit from Order Flow, meaning less attractive prices for investors?
Read Answer Asked by William on August 25, 2021
Q: Hello

which one of these companies is better from a growth perspective.

Also, with ransomware and corporate hacking being the new frontier for all CIO's and IT Managers, which 2 companies, in your opinion, have the edge with their technology and I can add these to my portfolio.

Thank you,

Rajesh
Read Answer Asked by Rajesh on August 25, 2021
Q: Greetings 5i,

Futu holdings - FUTU:NASDAQ (currently no ticker with 5i) , some say China's Robin Hood, reports next tuesday Aug 31.

Ive been interested in the growth story and the share price has pulled back considerably. Recently it seems the sector is bouncing off lows and perhaps with hopes the Tech Inquisition will end soon.


What are Your current thoughts here on the company, earnings expectations, and current environment?


Cheers!
Read Answer Asked by Duane on August 25, 2021
Q: I have about 10k$ to invest. For a 3 year hold, would you rather own 5 shares of shop, 200 shares of Ata, or 200 shares of and. Or would you suggest something else. Thanks
Read Answer Asked by Charles on August 25, 2021
Q: I would appreciate your expertise on Stelco current valuation; I have read your notes. STLC report states that current profitability results from both volume and price increases, and your notes indicate that the recent ore price fall and equity valuation hiccup is in response to fears of reduced demand. The question I have is whether the STLC recovery is likely to be sustained/built upon, for a significant number of years, or whether the industry earnings and prospects are simply volatile in the short run. We have Biden’s infrastructure program to which should bolster steel demand all around, STLC presumably has to purchase iron ore so their raw material costs should offset steel pricing variations, and current opinion seems to be that we are looking at positive momentum for commodities in general, which I assume is a long cycle event. May I have your take on these issues please and the outlook for STLC.
Read Answer Asked by Mike on August 25, 2021
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