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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 Peter, Ryan & Co.,
I bought PKI about 5 yrs ago, and it's done very well for me. I am a bit disappointed, however, with the rather slow dividend growth (this is the reason I bought it). As you noted, it's payout ratio is only 35%. So now I'm debating whether or not I should sell my position and invest in something else with a higher, growing yield, or wait in the hopes that PKI will be a bit more generous to its shareholders. What do think? Is the company hoarding cash for a specific purpose, or can I expect dividend increases in the future? Thanks,
Brian
Read Answer Asked by Brian on August 09, 2018
Q: Hello 5i,
Upon the recommendation of selling JNJ 64 shares with $6,000 profit, should I add PG to my portfolio or add to my ABBVIE, MRK and CSH.UN. Now I am at 5% in health sector holding these four stocks. I have 60 positions in all with 46 positions in segregated funds. I am 72 years young and investing for income. This is going mostly into an RRSP.
Thank you,
Stanley
Read Answer Asked by STANLEY on August 09, 2018
Q: I want to make sure that I am not overrating SJ. I try to buy quality companies and I have owned this one for several years because of the many positives you and other analysts have given it. One of those positives was management and with a new CEO and the selling out by Stella Jones International I am wondering if management may have regressed.

The latest results seemed solid in that guidance was maintained while sales and margins increased. I am thinking that it is the decrease in profit is what is weighing on the stock. Management says that the decrease is due to the transitioning of a Class 1 railroad company from a treating services only contract to a full service "black-tie" program and they go on further to say that they bought untreated ties from the Class 1 company and once they treated these ties they didn't make as much money due to higher costs. If I remember correctly, this is the same problem they said they had last quarter.

First, do you know what this program is all about? It seems to me that the Class 1 company is moving to a full-service on-going type of contract rather than a bare-bones contract to contract scenario. Ongoing regular revenues are usually better for a supplier so why is this one costing them money? Short-term pain for long-term gain? Or a management snafu?

The second drag is operating costs in the US southeast. Again, did management make a mistake or is this just one of the integration hiccups that come with takeovers? So I am back to my earlier comment about whether management is not what it once was or are these just growing pains. SJ has always been a lumpy stock mover and should I just view it as being out of the limelight for the time being with better things to come?

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on August 09, 2018
Q: In May and July, a couple of members wondered if it was time to move on from STN (and go to WSP) due to non-performance and you suggested it was. do you see anything in this earnings report to suggest a turnaround? I admit to a bit of emotion on this one as STN was once of the first stocks I ever bought. But continuing problems with "legacy" contracts has me questioning management. Time to give up the ghost on this one?

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on August 09, 2018
Q: Hi all at 5i, I have about 45k invested with only 5k in cash. I own all of the above names and was wondering if you were to free up some cash which of these stocks would you trim. If you think 5k in cash is enough, do you think any of these names would be good to trade for another name? Do you have any concerns over any of these names at this moment in time.

Feel free to deduct as many points as necessary.

Thanks,
Dan
Read Answer Asked by Daniel on August 09, 2018
Q: hi
Purely on a stock by stock basis, based on the short term possible performance of the stock, if you had to sell some of these stocks, which would (first 5) you sell and in what order? ( I like all of them but I want to reduce my leverage ) Do not consider them as a portfolio as I have other stocks in registered accounts. Reducing across all of them would not be efficient for the size of my account.
thank you
Francois
Read Answer Asked by Francois on August 09, 2018
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