Investment Q&A

Q: Toy is looking like another TSGI. The stock has been on a steady downward slope since July, now down around 30% give or take. On the basis of projections for 2019 the shares are trading at about 21 times projected earnings. Sales are expected to increase by about 7% in 2019, with earnings growing at around 10%. What is a reasonable multiple that the shares should be trading at? Unless there is something on the horizon that will increase growth, a 21 times earnings multiple seems too high for the expected sales and earnings growth. Something closer to 10 times would seem more appropriate. And if so, there is a lot more hurt to come by continuing to hold the shares. Is there anything that I am missing? Why do you think that the current price is justified? Why should shareholders continue to own the shares? And why this continued weakness heading into the Christmas season?

Q: Hi 5i Team.

I have positions in the three ETFs listed above representing financial and Canad/US real estate sectors. The ETFs are at a reasonable cost and provide good yields. What is 5i's opinion about these three ETFs.

Thanks

Iqbal

Q: Could I have your current top 4 or 5 picks in the junior to mid cap Canadian energy sector please. Thanks, Don

Q: I hold small positions in Heo nd Jtr at a loss. Is there any hope going for ward for these? If you were to hold just one,which has the better outlook for the next 2 to 3 years and why? Also, is Spb a buy at these levels? I'm concerned about their debt level,even though they have raised their outlook upwards for 2019. Thanx.

Q: Hi,

Can you provide your overall views on the transportation sector and your ranking of the three noted companies. Thank you.

Q: What would you think of adding to SPB today?
At june 2016 low any reason for the drop ?
Payout is low but no div increases in 4 years.
Thanks!

Q: I have a 1/2 position in CPD. Do you think this is a good time to increase to a full position? I hold this in a LIRA and consider it a long term hold. Thanks - Richard.

Q: Hi,

I read an article earlier this month that Glencore is shutting down production from one of its Cobalt mines until mid 2019. At the time this preport came out, KBLT had a short lived bounce but has since fallen back down to mid $5 range.

What do you think the odds are that Cobalt prices start moving higher again based on the Glencore issue? And if Cobalt moves back to previous levels from earlier this year, would you expect KBLT to move back to its previous levels?

Thanks,
Brad

Q: Good morning,
Both of our family TFSA accounts are currently invested in their entirety with a variety of Mawer Mutual funds (100% Equity). At 70 years old, I would like to reduce the risk profile of our TFSA accounts from 100% Equity to a more classic 60% (equity)/40% (fixed income) balanced portfolio.
Of the five investment options for our two family TFSA accounts which are used as an estate planning tool with the intention of never withdrawing any funds and leaving the proceeds to our grandchildren, which of the following options would you recommend, in what order and why?
Option 1: Staus Quo.
Option 2: Invest all TFSA funds in the Mawer Balanced or Mawer Global Balanced Fund.
Option 3: Invest all of the TFSA funds through a Discretionary Money Manager that currently manages our family RRSP and Non Registered accounts with total management costs of 1.30% (Money management fee, Sub Advisor fees, Custody fee, Transaction fee plus HST). The average long term target rate of return being 4.5% after fees for this balanced portfolio of which 25% of the portfolio is invested in alternative investments to supposedly further reduce volatility.
Option 4: In an effort to further simplify, reduce fees and perhaps improve long term performance of our TFSAs, invest all the TFSA funds directly in the Vanguard Balanced ETF portfolio (VBAL) through our discount brokerage account.
Option 5: Invest all the funds directly through our discount brokerage account in a combination of ETFs that covers 20% Bonds/32% Canada/32% USA/16%Global and if so what would be your preferred ETF recommendation.
I thank you in advance and look forward to hearing your response and recommendations.
Francesco

Q: I have room for one of these in my TFSA. Which one would you pick for best rebound when all this madness in the market goes away over the next 12 months? Thanks
Derek

Q: My energy setup currently is WCP (2/3) at a loss and BIR (1/3) at a gain. Would you take advantage of tax loss selling on WCP and replace with VET or trim WCP and buy VET as well? What would be your preferred setup?

Q: I need to invest in an energy company/ies and have decided upon SU and CNQ so that my energy component of my investments is appropriate . I am both an income and growth investor and at the appropriate time in the near future will invest in one or both of these companies. In your opinion is one of these companies a better investment considering my criteria (and why) or should I invest an equal amount in each. Thank you. Mike

Q: Hi 5i
I always thought tax loss selling was mainly a thing in the Nov/Dec timeframe. With the increased volatility in Oct / Nov is it possible to judge whether the volatility could be attributed to earlier tax loss selling or just general fear & profit taking? I'm not qualified to make a judgement like this and my question is more a request of what you'd expect for the remainder of the year and whether January would bring some relief.
I know you can't know with certainty but at a gut feel / guess what do you think the remainder of the year has in store?

Gullible :)
Mike

Q: I own a Brookfield Renewable preferred (Series 11) that pays $1.25 (5%) thru to April 30, 2022. If not called, it will convert to the greater of GOCs+382bps, or 5%. Given my view of interest rates, I am comfortable with the position, because even if it is not called, I will be left with what I expect to be a good quality credit with a relatively attractive yield.

My concern is that it seems to have got caught up with the recent volatility, and is trading well below $25. Currently it is $23. I want to add more, but I wonder if I am missing anything here. I would still expect it to be called in 2022, as I just would not expect management to allow it to float at what I expect would be an above market interest rate. But I am already underwater significantly more that I would have ever expected on this, and I am leery of adding to the position.

Thoughts?

Q: Hi 5i,
I am considering small average down purchases of the listed companies but unfortunately cash is limited so can't choose all of them! Could you rate/order them for rebound potential ? Currently MX & TOY are approx 3% each, FSZ 2%,and TSGI/SLF/SIS have been driven lower to approx 1% each.

Thanks
Mike

Q: Can you comment on the investment potential of Morguard reit and its dividend sustainability

Q: Both Altria (MO) and BTI generate great cash flows, have high dividends and have had a significant share price reduction lately. How sustainable are the dividends and what’s your opinion on me taking a half position (2% of my portfolio) in each for both income and as a potential play on the cannabis sector? I have a very well diversified portfolio and very long-term philosophy. Thx.

Q: Dear 5i
I'm very much interested in the conservative portfolio for when i retire with in the next 6 months . I especially like bank , utilities and reit ETF`s as the yields seem reasonable and the fact that the ETF`s pay the dividends monthly which provides consistent income during retirement .
My dilemma is that i think i prefer to hand pick similar stocks myself within each of those categories most of which have been recommended by 5i .This way would all likely offer a higher average yield as there is no MER to consider . The problem is that most of the stocks in those 3 areas (utilities , banks and rents ) only pay the dividends quarterly so as a retired person there is not the consistency on monthly income as there would be with buying the corresponding ETF`s . Is this generally a personal preference thing or is there one way you would advise for a soon to be retired person .
Thanks
Bill C.

Q: Hi, are the interest distributions in bond ETF’s like XBB included in the price of the ETF. So when looking at the chart of XBB over time are distributions included in the price? Thanks.

Q: Can you please explain how Methanex results correlate to the price for oil and/or gas.
And if there is a relationship how concerned should MX investors be with what is happening with the price of oil.