Investment Q&A

Q: Preferred shares have taken a killing this year, but is it overdone? Will preferreds be ready for a bounce next year? If so,
would ZPR be a good way to play the preferred shares market?

Q: Hi,
I bought it a month ago based on your upbeat position on the stock. Down 12% in a month, but what worries me most is that the stock seems to go down regardless of the market direction. Yet, the company looks good to me (re fundamentals, P/E and dividend), so I hesitant to cut losses and walk away. What is your current view of the company, do you see any growth potential in a mid term (1-3 years)? Do you consider the dividend safe? I know they increased it twice, but dividend cut will obviously cause avalanche selling - most of your subscribers experienced it with WIN...

Q: I currently hold Enbridge at 3.7 % of my 50/50 equity/income portfolio. Would bumping that up to 5% for a long term hold make sense at this time or should I wait until after Dec 16th.
Have a great Christmas everyone and thanks 5i for all your help.

Q: I thought with the threat of higher US interest rates gold would drop?

Thx Blake

Q: <I>December 03, 2015 (asked by Desmond)

Question: I would like your opinion on Saputo, would it be a buy at this time. Thanks for all the great information this year.

5i Research Answer:
Saputo is not overly exciting, but in this market that is not a bad thing. Good earnings growth is expected over the next two years, but it does have a fairly weak record of meeting estimates. Its business is fairly secure and its balance sheet is 'OK'. It is buying back stock, and at 21X earnings is a bit expensive. Over the past 15 years the stock is up nearly 10-fold, and we would be comfortable with a long term position.</I>



I have to mostly disagree with your response to Desmond regarding SAP. Or at least the tone I extracted from your response.

How could SAP not be anything but exciting if a person is looking to make money? Unless they "play" stocks for excitement as in gambling and look only at short term fun.

If SAP has been almost a 10 bagger in 15 years that is a 16.5%/annum return plus a constant growing dividend. An original investment of say, $100,000 would now be approx. $1,000,000. A profit of $900,000! Most people and retail investors would love to have that big a profit both $ wise and % wise as most never produce that in a life time.

I am an investor who does not care if a company meets estimates! So what? Who cares other than the media? Without insider information is not an estimate just that? An estimate, a guess?What matters is the question, "Is the company growing itself, revenue and free cashflow...properly and in a sustainable way?"

I find SAP to be exciting in the short term because I can sleep at night knowing I do not have to monitor it daily/weekly and it should continue to make me money as I sleep with a growing dividend income stream for my future retirement days. Just like CNR, ENB, BNS....

Have a great day.

Stan

Q: IPL recently raised it`s dividend and is now yielding 7.21%. As a person who relies on divs, I ask myself "Is this to good to be true? The chart is terrible but the div. is fantastic. So my question: If oil stays at $40 for a longer term at what point in time does this 7.21% become in danger? Three years,5 years? I understand that you do not have a crystal ball but is IPL turning into a yield trap? Thank You Ron

Q: <I>New Service and Special Offer:

We are excited to be officially taking over and re-launching a newsletter called the ETF & Mutual Fund Update....</I>


Congratulations on the expansion of your empire.
May you profit well.

Stan

Q: The addition of Comparables and Historical Analysis to the 5i company reports is quite useful and enlightening, another example of how you find ways to give subscribers more value for what we pay. I'm not certain how to relate the right hand graph (Value % CAD) in KBL's case 15.70% to the measures in the tables though; also the left EV/EBITDA chart number 14.51 going into Nov. is quite different than the table #12.4? Finally the bottom graph label is a little fuzzy on my screen but I think it's RSI, please confirm. Thanks, J.

Q: i was thinking of selling autocanada for a tax loss and repurchasing it 30 days later, what is your opinion fo that strategy.

Q: This company is going private. Would you recommend that I sell my shares in the open market today? Please comment on this latest development with Canamax.

Thank You.

Q: I know how you feel about knight, I feel the same way and have a large position. my question when does that massive cash balance on the balance sheet become a hindrance, I know goodman is a patient shrewd investor, but without any new agreements for quite awhile now the stock is marking time(maybe not a bad thing in this market), and actually with the 30 million coming back from crh, their cash balance increases.dave

Q: Last week I added to the following positions in my non-registered:

DSG, AYA, ATD.B, CCL.B, WSP, TCN, BCE and FTS.

Because the market is so volatile I only bought half of what I want in each with plans to buy the other half by the end of December.

Should I take advantage of yesterday's drop and buy the rest now or wait until the day after the fed announces the rate increase? Do you think there will be a small drop after this increase?

My other option is to put lower bids in that are good for the next thirty days and see what I get.

Q: I am a conservative retired, dividend-income investor with a pension and CPP. My portfolio includes mostly dividend-producing holdings (AD, AQN, ALA, BCE, BNS, CGX, CPG, PBH, RY, SLF, WEF, WSP, WCP, ZLB, XIT, Sentry Cdn Inc, Sentry REIT, TD Health, RBC Cdn Equity, Fisgard, and Annuities).

I am looking to add ZWH-T for income and some growth, acknowledging the T1135 inclusion and the dividends being treated as interest income. This would be held in my non-registered cash account.

Question 1 = would any dividend withholding taxes be reconciled at tax time, due to the USA-Canadian tax treaty?

Question 2 = would ZWH be an appropriate investment for my profile above? At first glance, it doesn't look like we have much foreign investments, but when you prorate the foreign holdings and/or income we have 30% non-Canadian investments (AQN, WSP are good examples). Is 30% too high for our profile?

Question 3 = I don't read anywhere about any hedging of the Canadian dollar. Am I at any currency risk?

Thanks for your help...much appreciated,
Steve

Q: Hi team. I'm trying to find an ETF that pays a dividend of 4% or more that has NO canadian exposure. The best one I have found is a new ETF called ZDH (International dividend ETF). The good: The PE is 13.3, which is surprisingly low (if you could verify), the yield is 5%, it's hedged, no holding has a weight above 2.3%, the largest sector is 27%. The bad: I don't recognize ANY company in the top 10 holdings, the MER is 0.45%, the liquidity is weak (can be a good thing when buying). Also, the dividend is above 4%, which as we've seen on the TSX this year, that often means trouble (CJR, WCP, LIQ, WIN, TMC, D.un). Would you recommend this to someone 1 year from retirement? He would give it a weight of 15%. Please take your time to respond. I'm in no hurry. Just want to be extra careful on this move since it applies to my dad. Thank you and great work!

Q: What do you think of this company and the reports? A sell, hold, or buy?
Is the dividend safe? Thank you!

Q: Thursday saw a further 10% drop in the share price of BNK, on massive volume (3x normal). However, I saw no clear news to justify the drop. Do you have any insight whether the Albanian tax problem is more serious than first appeared ? What is your prognosis for this stock ?

Q: What effect will the expected interest rate increase in the U.S. have on EFN? Have they borrowed. a substantial amount of money to finance acquisitions.
Thank: Jerry

Q: Hello again gurus!

I am interested in increasing my US holdings.

I presently hold the Vanguard Total Market and like its very low MER. I intend to add to my US holdings. What is your opinion of the BMO's ZWH?

Would you suggest that I simply add to my Vanguard Total Market Fund or put my new money into something like ZWH which, while it has a higher MER, also has a higher dividend?

Either way, I intend to buy and hold the ETF's.

Thanks.

Q: What are your thoughts on richards packaging as a long term growth stock with a 5% dividend in a TFSA Could it be a potential takeover stock by a larger company?

Q: What's with BNS? It's been dropping all week. Can you shed some light on this and what is he outlook for it?Thanks very much,