Investment Q&A

Q: Hi Peter and Team!! I do not have any exposure to emerging markets in my portfolio. Could you suggest an ETF for me, and is it a good entry point at this time? Thank you, Tamara

Q: Good afternoon, Peter & Co.
Considering your recent comments and analysis would you recommend that I sell my SIA and buy EXE? Also, I have had a decent run with CNE and it may now be overvalued. I am slightly underweight in the energy sector. Would you recommend selling CNE and moving to different energy company? I own High Arctic and Brookfield Renewable as well as small positions in Tourmaline and Crius. Dividends are not very important to me. I am underweight in the energy sector.
With appreciation.
Ed

Q: Could you please give me your opinion on Tourmaline's last financials and your thoughts on Nat Gas stocks going forward.

Q: I have to reduce energy component and am thinking of selling Veresen (VSN) and Crescent Point (CPG) Do you see any compelling reason not to sell either of these 2 stocks.

Wayne

Q: Recently, this thing has been dropping like a rock on heavy volume. Do you think this is due to tax loss selling, or are there some serious issues at work here?

Regards, Mike

Q: Plse deduct the number of questions that you feel is fair. We have been long suffering shareholders of the listed companys in our RRSPs which would you suggest to continue to hold and which ones would you suggest selling? Thks

Q: Thank you for your very quick answer to my inquiry of todays date - 11/16/16. However, relevant to your suggestions, we also own RY, SLF, BCE & PBH in other cash accounts. Still looking for other suggestions. Thank you.

Q: I took a flyer on both CGC & APH yesterday & immediately covered with stops on both to protect any downside. Today I was (on paper) up significantly on both, however the automatic market control system placed 3 separate Stop Trade Orders on CGC throughout the day & 2 separate stops on APH. Unfortunately, I lost on both. Perhaps it might be beneficial to advise members of the Catch 22 that can result.

Q: Are these stocks worth adding to at these levels. Have the higher rates been priced in or is this just the start of the rotation out of the sector if rates indeed go up

Q: I am a retired, conservative dividend-income buy-and-hold investor, with a pension, CPP, and annuities. I am looking to top up a half position in Fortis. Even though I am not a "market timer", I am looking at different options:

1. Just top up now
2. Wait for the Fed to raise USA interest rates in December. Theoretically, this would cause FTS to sell off, so I could buy it cheaper. However, roughly 45% of FTS is non-Canadian. So in this scenario, wouldn't the USA dollar increase relative to the CDN $, effectively making it more expensive to buy FTS (I am buying it on the TSX)?

What are the interest rate and exchange rate impacts and are they significant enough to cause me to avoid option #1, above?

The FTS metrics look really good right now (P/BV = 1.3, P/E = 16.2, P/S = 1.7, P/CF = 6.4). I'm tempted to ignore the interest and exchange rate issues and just top it up.

Your thoughts?

Thanks, Steve

Q: In the June 22nd answer below you mentioned significant adjustments (to income?) based upon GRT's foreign currency debt. If CDN $ weakens against USD (as is currently the case) would this be positive or negative to income? Thanks.

It is often difficult to compare a single company with an ETF, of course, because of the lack of diversification. GRT is fairly cheap at 11X cash flow, and offers a good yield. It is buying back stock and it raised its distribution in February. Cash flow rose 6.6% in the 1Q and the payout ratio is 67%. The balance sheet is solid.
One issue impacting performance is currency. Almost all of the company's debt is in foreign currencies, so there can be significant adjustments when currencies move dramatically. This does create some uncertainty. The company was also looking at a privatization and decided not to sell; this also disappointed some investors.
We think it would be fine to own. We would also consider Pure AAR.UN and Dream DIR.UN within the industrial space. have a question about 1113

Q: There does not seem to be an ETF covering the Venture Exchange. Can you suggest a combination of ETFs that would duplicate such an ETF? Thank you.

Q: CCL is roughly flat over the last 12 months and down significantly in October even after reporting what I would consider decent earnings. I understand the sector rotation going on after the US election might have played a part in October's decline but are there other things going on that are of concern? Is the debt level a concern? The stock just keeps drifting lower. I have half a position and was wondering if now would be a good time to purchase the other half?

Q: Being a retired accountant I can't help but feeling compelled to add my two cents on the question raised on goodwill.

Goodwill is simply the difference between the purchase price and the net book value of a company acquired. Say, if Co. A buys Co. B for $12 million and Co. B has a net book value ("NBV") of $10 million, then Co. A will report a goodwill of $2 million in its books. It's that simple.

You can call it an accounting plug if you like and that's not far from what it actually is. As to whether goodwill is good or bad, that really depends on each acquisition.

Using the same example, the $2 million goodwill is considered "good" if Co. B's actual assets are worth more than the $12 million paid for by Co. A. However, if the same assets of Co. B are actually worth less than the $10 million NBV, then that $2 million goodwill is really not an asset. That is the reason why so many acquirer companies have goodwill write-offs a few year after initial acquisition - when the true value of the company they acquired becomes crystalized. Hope that helps.

Q: If we believe all we are hearing there could be a lot of government spending on Infrostructure both in Canada and the US. With this in mind how would you rate the above companies for growth in the next 2 - 3 yrs? Which would be benefitting most from US expenditure? Any others you would prefer?
(If this is more than one question - OK) I always appreciate your good advice. Thks.

Q: Google is said to have a very wide moat with it being a leader in search. But we all know what happens in tech -- when people reach the top there is no more room to grow or something disrupts that moat and it comes crashing down. How secure is Google and CSU and Shopify of them not being disrupted by new, nimble startups?

Q: Hello 5I,

I see a lot of questions concerning ETF. Would you consider doing portfolios of ETF along the same same lines of your income and Growth Portfolio?

Paul

Q: Hi folks,I am perplexed by trading of Amaya,currently in $19's when the $24 takeover offer seems like a slam dunk. Am I missing something?? I have 400 shares at $20.20,held thru thick & thin and don't understand why stock would not be trading at or near $24 range.Why shouldn't I buy more in $19's and tender to $24 offer,thanks for clarifying situation for me,jb

Q: Do you think that there are there further short attacks going on, tax loss selling, or does someone know something that they aren't sharing?

Is it time to bail on DH?

Q: Hi 5i
I have encountered some Financial pundits who say that Good Will on a company's books would be more transparent if it was called "an accounting plug".
Where is this factor declared in Financials? Do KXS and SIS have Goodwill on their Books? Does 5i consider that Good Will is a valid descriptor in some circumstances

I don't ask many questions but I appreciate the service you provide

Ernie