Investment Q&A

Q: Hi, Transcontinental Ltd was recommended by some Portfolio Managers in the past, and has been on my watch list for some time. But it was Ryan's recommendation on BNN, last week that caught my attention. Although, company slowly started to divest of its printing/media assets over past 2 years and was making small acquisitions in packaging industry, but it was the Coveris purchase in April this year, which made most analysts to take note resulting in the stock earning a few upgrades. However, it looks like that brokerages are still not fully convinced of the true potential of this company although packaging should be close to 50% of company's business, post this acquisition.
Is this the debt level or the execution risk or the Management's capability and expertise or any other factors, in your view, which still has Bay street on the sidelines?
Identifying companies with huge inherent/untapped value and growth potential, at early stages has rewarded investors generously, in past. There are several examples in 5i portfolios, a few being, CSU, PBH and BYD.un. Do you see such signs with TCL.a ?

We own most of Bal Portfolio companies including CCL.b and RPI.un in packaging sector and are interested to add Transcontinental for above reasons (and more importantly, the fact that you like it). Would a 3% position be reasonable and is it prudent to buy a part position at current prices and wait for June 7 results (or 5i full report) for the balance ?

Thank You for your valued advice.

Q: I have a very young but well balanced RRSP portfolio (purely ETF at the moment). I'd like to include a small position in a strong growth company and looking for a solid recommendation for prospects.

Thanks as always for your guidance!

Q: Hi, I am trying to raise some cash and reallocate for buying a new position ( TCL.a).
Most of my holdings have done well ( many same as Balanced and a few from Growth 5i Portfolios) with moderate to sizable gains since inception with the exception of above names ( Negative YTD Only). I like the prospects of some of them with portfolio weights TOY (3.5%), SIS (3.5%)and SJ (2%).
BCE and ENB are fairly old holdings with 3.5% weight each and have not been acting well for a while. Over past few months, I have sold all KWH.un and most of ECI
( reduced to 0.75% weight), due to rising rates and other company specific concerns. DOL (1.25% weight).
Will it be reasonable to eliminate ECI and DOL (small positions) and/or reduce BCE/ENB ( BCE more due to muted growth prospects and ENB due to its high debt and pipeline sector concerns).

Thank you for your valued advice.

Q: Looking to replace RME in my "manufacturing and Industrial" sector of my Income producing portfolio. I currently hold WSP, CSH.UN, NTR, CAE, ET, FTT, DIR.UN - can you provide some candidates I can take a look at ? Once again, I greatly appreciate your advice.

Q: Is it time to switch AFN for TCL.A? AFN pays a nice dividend but it seems there will be more upside to TCL.A moving forward. You comments please.

Q: Hi, I am having trouble deploying some cash but have thought that GUD would be a good place to park it. My concern is that it is currently a laggard, and when it does finally decide to make a play that pushes the stock higher, are we looking at enough of a gain to cover any upward momentum the company may not be participating in currently?? How significant would you expect a the move to be/ what's the reward versus the risk here?

Q: My question is about allocation of Canadian Banks in 5i Portfolios and what would be a reasonable weighting in a broad portfolio of 30-35 holdings which looks 80% like a Balanced with 20% Growth. BNS is the only Canadian Bank held in 5i Balanced Portfolio (4%) and Income Portfolio (6%). Historically, Canadian Banks have provided substantial returns through dividends and capital appreciation. But, I like 5i approach of finding companies with value/growth potential in small/mid cap universe and structuring portfolios. By association, my portfolio weight in Canadian Banks has grown to about 15%, CM,TD and RY, in order of 10.5%. 3% and 1.5%, respectively.
Would it make sense to reduce these holdings to align more along the line of 5i approach ?

Thanks.

Q: Hello

I am relatively new to investing in equities. I have some SJR.A shares in Shaw and have been considering converting them to SJR.B shares. Would that be a good move? I plan on holding Shaw and Telus long term in my portfolio.
Thanks
John

Q: I am looking for some guidance regarding a retirement plan for someone who is mid 40's; doesn't work for various reasons and has been using an expensive investment advisor. She doesn't know or want to learn about investing for herself. She requires Canadian monthly income and what I think makes sense is to invest her funds in a CDN hedged fund that tracks the S&P 500 such as VSP. The average annual return for this fund is 13.9% since its inception date of Nov 2012 and it pays total dividends of 1.5% annually. I guess I could look at the US website to see the longer term investment returns for the S&P 500. I was thinking of suggesting an ETF REIT for monthly cash flow but the investment returns are much less than the S&P 500. So my thoughts are to invest fully in the S&P 500 and take out money when needed either on a monthly, quarterly or annual basis. Its a simple plan to understand and should work. Of course the S&P 500 will go down at some point in time in the future but with 40 years to be invested I don't think this should be a problem as long as the funds stay invested in the ETF. Your comments would be greatly appreciated.

Q: this company is currently trading at .28 cents a share and is reported to be the next big winner in the Packaged Foods sector......any comment ??

Q: Your info on DOL is currently showing a P/B of - 65.329. Is it really that cheap?

Q: I know you don't follow many U.S. stocks. but wondering if you would have an opinion on Alamo GRP Inc. I own 100 shares of this company and would like to add more.. Tihanks. Ernie

Q: I have a sizeable position in the Mawer balanced fund in my non-registered account from the sale of house a couple years ago. I have treated this as a standalone portfolio so that should I decide to use the funds for a large purchase such as another house, I do not need to make a larger number of trades to rebalance my main portfolio.

As I do not anticipate using the funds for a number of years, I have been considering replacing MAW104 with Horizon's swap based ETFs to defer any taxable income and create a balanced portfolio from the 5 funds. My thought is that over a number of years the tax savings and reduced MER may outweigh the potential returns of the actively managed fund.

My main reservations in proceeding are the liquidity of these ETFs through an economic downturn or major market sell off, and with the solid long term returns of the MAW104 fund, is there really much upside in making the switch?

Appreciate your thoughts.

Q: Dear 5i,
I am frustrated with BUS! We are down 55% in our TFSA's and it shows no sign of recovery even after a fairly positive quarter. My feeling is that buyers are moving over to NFI with their MCI division they produce everything that BUS does. I think BUS has lost its niche market. What are your thoughts? I hate to sell with these losses in my TFSA. Is their any hope for a recovery?

Q: Hi Team,
Is there any ETF that SHORT the whole Canadian Stock Market ?
My reason to short the Canadian market - because I have pretty good unrealized Gain on all my portfolios.
Thank you as always,
Tak

Q: Just a quick comment.
Congratulations to Ryan on his BNN Past Picks. I think that is the best results I have seen, certainly for a while.
Ian

Q: Regarding the question on transferring rrifs between carriers

The relinquishing institution MUST make the total annual payment prior to transfer

Assets can be transferred in kind or cash or combo

Q: Hi team,
Just a quick note to say nice to see Ryan on Market Call yesterday. Too bad he was Trumped and had less time for questions. I guess the big guy didn’t realize who he was pre-empting.
dave

Q: Thanks for the great service. I have a general question I hope you can answer for me. My understanding is that when a person passes away, their investments are deemed to be sold on the date of their death for tax purposes. However, can these investments, (stocks, mutual funds, ETFs, etc.) be transferred directly to the beneficiary (not a spouse) without being sold? And would this be true no matter what type of account? (Cash, RRIF, or TFSA)
Thanks for your help.
KEN

Q: Comments in a Globe article this morning:

The valuation retreated to 7.3 before the government issued its final decision and has since fallen even more with Thursday’s selloff. But some analysts believe that if Aecon’s EV/EBITDA multiple, based on estimates for 2019 earnings, stays in line with its peers in the construction sector, the shares should be worth considerably more.

The logic of the company being worth $20+ if the Chinese were willing to pay it then and the backlog has improved makes sense to me. Do you agree and is it an attractive buy given the huge drop?