Investment Q&A

Q: For the past 8 years I have been trying to pick up yield by buying convertible debentures. My objective for the past few years was to get a yield to maturity of at least 5% on these debentures. Today Superior Plus is redeeming one of their convertible debentures (SPF.DB.F). I would like to buy another convertible debenture from the cash that I will be receiving. I am considering JE.DB or JE.DB.B. Both of them have yields to maturity in excess of 6%. What do you think of these two convertible debentures as a fixed income investment? Note that I am not concerned with conversion privilege. This is a proxy for exposure to a fixed income vehicle. I am only concerned about the yield and the company's ability to pay the principal at maturity.

Thank you

Q: For the past 8 years I have been trying to pick up yield by buying convertible debentures. My objective for the past few years was to get a yield to maturity of at least 5% on these debentures. Today Superior Plus is redeeming one of their convertible debentures (SPF.DB.F). I would like to buy another convertible debenture from the cash that I will be receiving. I am considering NWH.DB.B or NWH.DB.C. Both of them have yields to maturity in excess of 5%. What do you think of these two convertible debentures as a fixed income investment? Note that I am not concerned with conversion privilege. This is a proxy for exposure to a fixed income vehicle. I am only concerned about the yield and the company's ability to pay the principal at maturity.

Thank you

Q: Dear 5i,

Recently there has been some Q&A about Canadian company shares that trade in Canada and the US, and pay dividends in US dollars. I believe CSU is one of these. I looked into a bit and it seems to trade on the over-the-counter market in the US. Is that correct? If so, would you advise journaling shares from a $CDN account to a $US account to avoid the commission on the exchange rate on the dividends paid? My understanding is the OTC market is not very liquid and is generally to be avoided.

Thank you, Michael

Q: Nemaska is also moving fast, although not as fast as RCK. Any explanations? Target prices?

Q: Can you please explain something to me? Why, at least based on what I read in the newspaper, when the economy shows signs of deteriorating putting off risk of an interest rate rise the market goes up. When things look better for the economy and there is talk of raising rates the market goes down. Wouldn’t most legitimate business do better in a better economy? So shouldn’t it really be the other way around? Why are stocks thought to do better in low interest rate environment? And is it true that they do?

Q: ULTA update:

Since I 1st asked about ULTA I have been waiting for an entry point as it pullbacks a bit.

There was a big ULTA block print of 900,000 shares at $232.75 via Goldman Sach. That is $209,475,000.

Was Smart Money buying or selling is always what needs to be figured out.

It is sitting around that price today and bounced off the $230 support level.

Will be interesting the next few days I suspect.

Q: In my RRSP, 28% of my portfolio is in U.S. stocks. I am getting concerned about the US election, and what it might do to the markets, in the short term, as well as the overall U.S. economy in 2017/18. With the Cdn dollar being down around $.76, would it be advisable to take that down closer to 15%, instead of the 28%, for a while?
Also, I presently have 25% in cash, and want to put half of that into something low risk,but better return than cash, for up to 2 years. Would ETFs with a stable history, be a good place to put the cash,and if so, can you recommend a couple? Or another idea, instead of ETFs...
The remaining 47% of the portfolio is in the Cdn market, and some Emerging Market ETFs.
Thank you
Grant

Q: I am looking for a term of reference from 5 I on how to decide when to finally get rid of a company, despite that it might be a good one, overall.

In the case of MDA, for instance, you finally threw in the towel because, essentially, it has been dead money for some time even though there's nothing much wrong with it.

Would it not be the same case, then for Airboss? I've come back to where I started, at mid-$15s ... and then watched it drop, almost daily until yesterday it whispered by on $13. Is it not time to throw in the towel on this one as well: to acknowledge that though it may be a good business, it's a lousy stock and opportunities are being wasted.

Would it not fall into the same category as Linamar, and Magna, for instance, who are now just treading water as well, due to a lull? Once again, great companies, but it doesn't seem to be the time to own them.

While I am a longer term investor, yes, and take the long view, I think perhaps treading water with Airboss is not a good thing right now.

Your thoughts, please. They are always much appreciated!

Q: Can you please comment on ARZ after today's fda approval for Yasprala?

Thanks
Sean

Q: Hello 5i,
My only energy exposure is Shawcor. What would you recommend to complement this in energy. Thanks.

Q: There was a quest on BNN yesterday that said he is short RDS.B because he believes that the dividend will be cut. Can you please give me your comments on the likely hood of this happening.

All the best, Darcy

Q: Hi Peter and team,
I own a reasonable amount of St. Jude medical which is being purchased by Abbott - approx. half cash and half stock.
My other large cap medical holdings includes.
Pfizer, Merck, Medtronic, J&J
I also own GUD & recently bought some Savaria, small portion of EXE
Each has approx. a 1-2% allocation.

Would appreciate your thoughts about when & / or how to get out of St. Judes and what to replace it with.
I don't want more mainly pharma so probably wouldn't add Merck or Pfizer.

I like stocks with a moat such as SJM, MDT, Stryker, Zimmer Biomet and Savaria.

I don't know enough about Abbott to decide if I should simply take the shares. If Abbott is going to be more of a device / equipment company and looks good here I would take the shares.

I am happy to hold these 5-10 years (probably longer) and am close enough to retirement - 3-5 yrs that income and lower risk become more important.

I would appreciate your input as to strategy here and what to do with the cash / shares.
Could you rank the above names taking these factors into account?

Thank you in advance for the great service and your input. ( Please subtract the number of questions you think is fair.)


Tulio

Q: I have held MRT.UN for about ten years. The reported book value is $25.56 while the stock trades for about $15.70, yielding 6.1%. Why is there such a large discrepancy between those two figures? Is this discrepancy a sign of poor management? What can management do to get those two figures closer together? Do you consider MRT.UN a Sell, Hold, or Buy? and why?

Q: trans eastern power is this an ok stock ,good management? payout ratio?

Q: Peter and team,
Please let me know if any of your favorite companies surprised you with how well they have held up during the recent market pullback.
Thanks for your appreciated guidance.

Q: Could I get your opinion of EFR, and their recent stock offering.
how do you view management?
Is this offering going to be available in Canada.
I don't see how uranium can not go up in the next couple of years?

Q: This is a response to the question posted by Donald on CBO. Be careful with CBO. My experience over the last 14 months has been that the monthly distribution has been completely offset by a reduction in unit price so my total return has been 0.2%. Far different than their posted yields and returns. The HY acct paying 1.5% might not look so bad now.....

Q: Long term for increasing dividend which of the above would you hold? They pay a similar dividend and have performed similarly over the past 5 years. The taxes are less for ENF compared to BIP.UN when held in a nonregistered account however like I do. Thanks.

Q: I hold EFN in a TD Waterhouse SDRRSP account. What do I do with the current EFN shares I hold? Do I have to sell and decide which spin-off I want? If I choose to do nothing what would happen to my shares?

Q: Question on CSH:Own small position 800 shares CSH at ACB of 6.87$. Thinking of switching to NWH.UN also selling loser TA to soak the capital gain and provide enough for 2% position or is adding to position of CSH better. Like the additional 4% monthly distribution.Also own SIA at 2% position. Is it worth the risk for the higher yield ? Wht is the best course of action in your view ? On portfolio review list but not before december I was told unless it improved ?