Investment Q&A

Q: Walmart is the only retailer in my diversified stock portfolio and is part of my Consumer Staples sector allocation. Much of my portfolio is invested in dividend aristocrats like Walmart, as I am retired and need the dividends. However, the media has done a pretty good job of scaring the heck out of me by saying that Amazon will out-compete Walmart (and everyone else in retail for that matter). I am concerned that future profit growth will be a challenge as WMT is investing heavily in e-commerce. However, WMT is ranked 5 stars by CFRA (formerly S&P) and should benefit from US economic growth under the new administration, so should I stick with it? Or should I switch to a more technology-proof consumer staples company like Colgate Palmolive?

Q: Hello. I have a 31-year old son who I've been investing on behalf of for the past two years. Since he started earning a regular income, he has loyally saved and invested in his TFSA (up to the maximum allowance) and started to make some contribution to his RRSP as well.

In his TFSA, he has three stocks (TD, AQN, ECI) and other Canadian and US ETFs (VFV, XIU, XEG, ZLB, XQQ, VEF). Now, given the fact that he has some time before retirement, my new plan is to sell ECI, AQN, or possibly BOTH to buy into more growth-oriented stocks. Do you think my new strategy makes sense? Should I sell ECI, AQN or both or none?

In my mind, there are several stocks that fit into a long term growth strategy. These include SIS, PBH, ATD.B, KXS. If you can think of a better one, please let me know. Your advice is very much appreicated. THANK YOU IN ADVANCE.

Q: I have ridden many stocks up and down over the last few years. I know you shouldn't sell unless something changes at a company but I am also tired of seeing profits slip away. I have 110% gain in PBH (but it was a half position to start with). What would you recommend? Thanks!

Q: Hi 5i. Like other fellow members, we too have difficulty deciding when to sell equities which have done well.
We hold Alimentation and CGI Group in our TFSA's, and my wife holds BMO in her RSP, all of these have ~100% gain over our ACB. Their 52wk Hi prices occurred recently (Sep and Nov).
We also hold Stella Jones with a 68% gain, and Parkland Fuel with a 60% gain in our TFSA's. PKI's 52wk Hi was recent (Oct), while SJ's was almost a year ago.
We do not wish to sell any of these equities outright, but are thinking about re-couping some (or all) of our original investment.
Another issue clouding our decision : does a solid dividend (ie BMO and PKI) change the decision ?
Do you have a general rule of thumb to follow ? Could you give us your advice regarding what to do here. Regards. Your advice as always is much appreciated. T.

Q: Just a quick take on your opinion of this.

Q: Both CSU and ATD.B are down from their usual value. Is that surprising ?

Q: I would like your thoughts on whether it is a good time to buy REITs given the pull back in some recently. I am looking at AD, HOT and HR so could I get you opinion on these or others that would be a good buy now.
Thanks.

Q: Reko generated 19MM in cash in the most recent fiscal year ending July'16.
They just delivered another profitable quarter along with their FIRST ever dividend of 20 cents as a special dividend. With a hard book value of 6.61 and working capital of 3.15 per share and virtually debt free how would you assess the investment potential of the company?

Q: Good day to Pete and Ryan,

A few questions:

1. Does SIS SYZ and ET offer dividend reinvestment plans? I can't seem to find anything on this, so I am assuming not. However, could you please confirm on this?
2. If you had a 10-20 year timeframe, what would be your top pick of these three for a buy and hold strategy?
3. Sylogist vs. Evertz - which one do you prefer?

Thanks guys!

Aaron

Q: I am trying to do some tax loss selling. I am down 13 percent-ish on both ECN and EFN. Do you think these companies are worth holding for long term? How much free cash flow they generate? If interest rate goes up will they be affected? What kind of ROE they have, are they better than canadian banks? Do you think is it better to hold canadian banks instead?

Q: I did not sell it when you advised. Now I am down 80 percent on it. It is in my registered account, so no tax advantage. Do you think it is worth holding if I can, for 5 years? Or should I just run with what I have left. Do you think will this be profitable or will get bought by someone in future(3 years)? Will they need to borrow money next year to survive?

Q: I was wondering if you can comment on the Forge First hedge funds in specific and in general it is a good idea to be investing in market neutral and income hedge funds when interest rates are rising.

Q: After market close today,NFI announced sale of 167 buses to San Francisco Mun.Railway.Also a recent sale of 47 buses to Transdev.Hopefully positive market reaction after recent few hiccups.Thanks for u usual great services & views

Q: Dec 05/16 ? asked by Shyam.

I believe your answer is incorrect as follows:
Buying the stock today (Dec 5/16) would settle in 3 days on Dec 8/16. But the stock is already trading ex-dividend on Dec 8/16.

Q: Hi 5i! Saw this article on the potential resolution of Northland Power’s strategic review:
https://www.bloomberg.com/news/articles/2016-12-05/china-three-gorges-sdic-said-among-bidders-for-northland-power
The article mentions a couple of potential bidders and a recently passed deadline for initial bids but does so on an “individual who wishes not to be named” basis. What would be the best you could do as an estimate of potential upside on a bid, downside on nothing emerging, and probabilities of the various alternatives? I have a decent gain already, which I could book if estimations favor doing so, but I have hung in to this point to see how the review might go. Thanks!

Q: Good day folks,always thank-you for your wisdom,i'm 72 and i follow your income portfolio,therefore withing some exceptions all my retirements RSSP-TSFA are basically close to the 5I Income,in order to diversify a bit toward the world emerging bond markets,I would like to have your opinion on EMB.
ThankYou
Dan

Q: What is your opinion on buying FSZ and selling PWF at this time with respect to future income and growth potential? Joe

Q: I still own both Calfrac Well Services and Canyon Services Group in my RRSP so I am not able to benefit from tax loss selling but I am considering selling my Calfrac and adding to Canyon. I would appreciate your opinion on this strategy.

Lloyd

Q: REITS

My question concerns the viability at all of having REITS in an income portfolio. A Reit does not pay tax at the corporate level as long as their distribute the income to unit holders. Consequently the dividend tax credit does not apply.

Is a REIT therefore like a bond issued by a real estate company with the added tie in to the real estate market valuations ?

Would an income investor not be better off to simply buy a preferred stock from a real estate company that offers an attractive yield?

Thanks

Paul

Q: Hello 5I team.
I have positions in both BDI Black Diamond and HWO High Artic Energy. My average cost for BDI is $17.98 and the average cost for HWO is $3.75. Both positions are worth between $5k-10K and are part of my energy services portion of the portfolio. I am considering my options presently in regards to consolidating to one name or adding (3K) to either one. I am traditionally a long term holder and I am thinking I would like to bring down the cost of my BDI shares but maybe HWO is a better choice overall? Please advise me what you might do in this matter.
Thanks Jeremy