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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 5i,

As of today, which stocks would you purchase with a full position in an RRSP to hold for 3-5 years?

Which stocks would you consider value stocks to purchase today for 1/2 to a full position in an RRSP?

Thank you for your excellent service and advice.

Cheers,

Jerry & Debbie
Read Answer Asked by Jerry on August 18, 2017
Q: Thinking of deploying some cash, maybe 3% of portfolio, between high yielding names that could have significant upside if things work out well for them (not usually my investment strategy - buy names with significant challenges and hope things work out). Among the names I'm considering are Callidus Capital, Pivot Technology and Alaris Royalty. Any problem with this strategy? I'm particularly intrigued by Pivot's eps expectations over the next few years (granted only one analyst follows them but he is forecasting 2018 eps at 63 cents and 2020 eps at $1.24.

Thanks.

John
Read Answer Asked by john on August 18, 2017
Q: Good morning 5i Team:
My question regarding the six companies mentioned is about Equity by Geographical location.
Lets say I only have the aforementioned companies in my portfolio.
With the exception of BCE, all the other companies have a portion and sometimes a sizeable amount of their revenue coming from US or International divisions.
From the Equity by Geography scenarios I have seen; this portfolio would be considered 100% Canadian.
Am I misunderstanding this or should some of this portfolio be considered US or International even though all companies are Canadian.
Thank you as always for your concise, informative and professional advice. Wouldn't have the confidence to be a DIY investor without 5i.
Read Answer Asked by Dennis on August 18, 2017
Q: What are your thoughts/valuation on VNR in the 5i income portfolio?
Based on the entry price, it looks like you bought around mid 2014 and had a nice 40% gain, inline with the other utilities. But now VNR never gets a mention for utilities to own, and the recommendation is always between FTS, AQN, BEP.UN, or NPI.
I'm retired, living on dividend income and interested in being more defensive in my portfolio and increasing my position in utilities.
Read Answer Asked by Curtis on August 17, 2017
Q: For those deeply under water on CRH, still in the stock and looking for positives:

1) Look at the Cash Flow Statement (not the Income Statement):
- This business makes real cash... CF-Operation is $9.75M
- Deducting 'non-controlling interest of $2.2 still leaves $7.5M
- CF Financing noisy due to retirement of high interest Crown and replacing by Scotia 3.5% loan - but there is cash generated for acquisition, debt replayment, etc.


2) Mawer Management is not selling... they are buying (as of end July)!
- Guy wondered about Mawer on July 16. I also track them as they are the best Management firm. Like everyone, they will have their share of losers and this may be one (they are sure deep under water) - so no guarantee but they are buying, not selling:
- Q2 data from Morningstar, they bought 924K shares and owned 6.43%
- How about July when the CMS reimbursement rate occurred? They bought +24% more (they manage the 'BMO enterprise' fund)
- How about after Q2? That we don't know yet...


3) One Director bought shares (independent Director, not Management)
- Per canadianinsider, Tood Patrick bought 50,000 shares on Aug 9/10
- Still would like to see the CEO or other Management buy but this is a first sign.
Read Answer Asked by Jennifer on August 17, 2017
Q: I'm confused by the following 5i answer excerpt in response to Dave's question on August 16th.

"5i Research Answer:
The key here is that when reading our remarks, our comments are meant to reference the 'company' and not the stock price. A declining stock does not make a company 'bad'. We cannot predict sector movements nor stock prices, but we try to focus on the quality of a company."

Do I take from this that 5i doesn't take into account the fundamental "value" of a stock when making its recommendations? If so, I feel this is missing the point in making profitable investment recommendations. The highest "quality" company may be the worst possible investment if its stock is outrageously over-priced.

There also seems to be some inconsistency here as well. In the same answer, it was stated that a company like CRH may have more investment potential than another company since its stock is oversold. Another answer on the 17th suggested that the asker not chase the stock of Chorus Aviation (CHR). These answers indicate to me that stock price is being taken into account in 5i Research recommendations.

So what is it, is stock price ("value") taken into account in 5i Research recommendations or is the "quality" of a company the only criteria used in making the recommendations?

Thanks,
Colin
Read Answer Asked by Colin I on August 17, 2017
Q: Regarding the " legal reserves " question on Crius Energy. I wrote Investor Relations and asked them. This is the reply I got ........
Hello Garth,

The legal reserve charge is related to various claims and proceedings that Crius Energy is a party to, arising in the normal course of business, including several ongoing litigation and regulatory matters relating to certain sales and marketing practices. The company is significantly closer to resolution of these pending claims and has entered into an agreement in principle to settle these matters.

I hope you find this helpful,
Kelly.
Read Answer Asked by Garth on August 17, 2017
Q: Greetings,

I have a full position in Altagas spread across three registered accounts. I've held this for years and plan to keep it but I was wondering whether it would be a good idea to sell the shares now and buy the subscription receipts. Seems like the only downside to that would be a case where the big deal falls through but the stock prices goes up. Can't see that happening. Am I missing something?
Read Answer Asked by Gerald on August 17, 2017
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