Investment Q&A

Q: A comment on Roland's question:

The Netherlands listing (UN) is subject to a 15% withholding tax on the dividends, whereas the UK listing (UL) has no such withholding tax. For a taxable account, this doesn't make any difference, since the 15% can be deducted from the Canadian tax ultimately payable. However, for an RRSP account, this 15% tax is irretrievably lost, effectively reducing the dividend you receive by 15%.

Hence, I would recommend buying only the UL listing for RRSP accounts.

Q: I just saw an article probably announced by the Feds in the latest budget that there will be new legislation on "Bail-In" for banks. I don't know too much about the details, but from my understanding the current framework is that the gov't will step in if the economy is bad enough to help support the banks from collapsing or failing.

The latest change will make it that the creditors of the banks will be on the hook and will have an option to swap their bonds to equity?
Is that correct and what is your take on how this will affect the risk of Canadian Banks?

Q: Hello,
As a follow-up to Andreas question,IT,as expected, has fallen on AYA news but the magnitude of its decline is surprising - almost as much as AYA in percentage terms. Can we expect similar bad news to AYA now or in the near future?
Thank you
Ed

Q: 2 stocks that you do not seem to like stb and dci, have been big winners fo r me up 20 per cent on each plus the annual dividend of at least 12 per cent on each. can you comment. dave

Q: I bought the Canaccord preferreds about a year ago. As usually happens, the price of the preferreds went down with the normal stock, to the extent that the yield is now around 15%. Is this yield safe? Can I add to my holdings while I wait for CF to recover?

Q: In your Mar 23 response, you indicated guidance was key...so I scanned their 2015 AR looking for guidance. I expected to find some 2016 goals and a CEO signature. Only found the Executive Summary...where the only guidance is they "expect" to de-lever by paying down some debt...& unsigned. No commitment or targets there. Your thoughts?

Q: Intertain gets hit again. What do the shorts know that I don't? Of course I know about AYA's troubles, and the usual regulatory risks. But the earnings and guidance seemed good. Still the shorts pile on, and they are right again, just like with CXR. I added a bit on the earnings news but am about to get stopped out again. It seems to be a real losing battle to go up against a high short position on any stock. These guys just seem to be more powerful and perhaps have better info. Opinion?

Q: Hello 5i
I've been watching Lassonde for some time and would like to know if it is on your short list to cover?

Q: Hi 5i: Over the years I have heard several advisors on BNN say that Unilever is a good way to access emerging markets. I just checked RBC Direct and found 5 or 6 different codes for Unilever (including UN and UL) and am not sure which I should buy (if I buy). Could you advise? And what do you think of the Unilever for EM thesis? Thanks

Q: MAL Chairman of the Board, N. Murray Edwards owns 74% of the common shares. I know we like the executives to have skin in the game, but does this high of a percentage create any concern? The annual financial form does state that no owner controls more than 10% of the voting shares.
Thanks

Q: I am a retired, conservative, dividend-income investor with a pension, CPP and diversified portfolio of mostly dividend payers (AD, AQN, ALA, BCE, BNS, CPG, CGX, PBH, RY, WSP, WEF, WCP, ZLB, XIT, Sentry Cdn Income Fund, Sentry REIT, RBC Cdn Income Fund, Annuities, Fisgard Capital).

I have held PBH for quite a while and need to trim it (for the 8th time), yet again. I am looking to build a position in another consumer stock (already hold CGX, PBH and those within ZLB and the above funds).

I think ECI would make a good fit, but I am concerned about the high P/E at 27.8 and high P/BV at 3.51. Also, this recent purchase is USA-based.

I am looking for a reliable dividend payer, with some dividend growth and capital gains growth as well. Your comments are appreciated. Thanks...Steve

Q: This seems like a great business - management seems has done a great job of improving customer retention rates and growing the business but they are about to close on a large and transformative acquisition. They trade at about 9x EV/EBITDA and they appear to be paying about 15x for the acquisition but claim it to be accretive. I've gone through their numbers and have trouble seeing how it gets to be accretive. Your latest report is from August 2015 - have you been looking at this acquisition and do you plan to do a report in the near future?

Q: BEP.UN has very thinly traded options,(like most other CDN options). Is it worth the effort to try and add portfolio value by selling calls against my position, or selling puts if I want to increase my position? Thanks for your response....Jim

Q: The Kobo ebook version of Market Masters, which was mentioned earlier this month and includes an interview with Peter Hodson, is available this weekend (March 25 - 28) for only $4.99. If you look it up on the Chapters Indigo site, there is a link to Kobo to buy the ebook version.

Q: looking more carefully the insider trading was 1.5 million dollars, like isn't that a real small amount.
secondly i have been in the markets for 40 years and when amaya took over rational there was so much action in the stock befor the transaction it was unbelievable, obviously i have no proof but i was convinced at the time there was insider trading.
it seems to me this was baazov but evidence and proving it is a whole other scenario. please comment dave

Q: Hi Peter, Ryan and Team - Although we can't ignore all the controversy surrounding Amaya since it has a major effect on the stock, based on just the fundamentals, balance sheet, earnings and potential earnings would this be a good company to buy now. Also what is the debt level - is it a concern - and could you provide the level of insider ownership as well. I have found your your advice to be invaluable ever since joining 5i Research - what a great service! Thank you.

Q: Hi,

I understand from your, rating and description of UW.UN, that you consider it to be a good investment for income investors due to its high and sustainable yield, and as well as the possibility of small distribution increases in the future.

Can you please clarify your position on AW.UN for long-term investors who are looking for a combination of both capital gains and distributions (In a registered account, so ta is not a consideration).

What is your estimate of the increase in share price of AW.UN over a few years? Is it something along the lines of 4% to 5% yearly?

Thanks,
IF

Q: This shipping has been beaten up so BADLY and the yield is so compelling. I know probably shipping companies were suffering from historic low volume of global trade, but what is your guys' thoughts on it. I am more like a conservative income investor, so I think why don't buy a bunch of companies at low prices while gauging 12% a year? Sound like a good idea. Please give me your thoughts. Much appreciated!!! Tao

Q: It seems to me the charges against Amaya's Baazov are more akin to tipping and stock manipulation than insider trading, probably even more difficult to prove. However there's a cease trading order on these insiders so wouldn't that affect Baazov's ability to continue with his $21 bid, even if he wanted to? Also how many months might this case drag on before people get their day in court and isn't it likely the stock will mostly mark time till things are resolved?

I wouldn't be in this stock except for 5i but my average cost is <$8 having been in since 2013 and I have taken profits 4 times up to $35 so even though I didn't act on the Feb.29 blog post (actually sold some more @$19) I did act on the CUS reco and am currently +5%, so thanks for that. It's my opinion that we are all personally responsible for our own actions, not someone else! J.

Q: Can you please shed some light on why CXR is down 8% since the call this morning? I thought the call was positive and it helped to break the correlation to Valeant's business issues. What on the call is being interpreted so negatively by the markets? This doesn't impact my decision to hold long term as I got in at a very high price, just trying to educate myself on market moves. Thanks again and again...John C.