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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: I piled into GNW.us just days before management confessed to large capital shortfalls causing shares to fall off a cliff. Management would have known about the significant deficit in reserves months ahead of releasing results, yet I see no actions pending against them by US regulatory bodies.

I compounded my buy error by anchoring on my much higher cost, a logic error well documented in behavioral economics. I thought GNW.us owned a chunk of the Canadian company Genworth (MIC.to) . I could not confirm whether GNW.us still owns a significant percentage of Genworth Canada. I browsed your two earlier comments on GNW.us but things are said to have changed since then.

Is it best to sell and salvage what’s left? Or do you now see some benefit in waiting? Is it wishful thinking that the remaining value is now less likely to evaporate?
Read Answer Asked by Adam on July 13, 2015
Q: Baker Hughes (BHI.us) has agreed to be bought by Halliburton (HAL.us) for consideration that includes HAL shares plus cash. Notwithstanding the takeover by HAL, BHI often trades well below the value of the proposed takeover price. Is it best to sell BHI.us now and move on? OR : In your opinion, is it better on balance to wait for the merger to close before taking action, if any. I am not looking for a perfect answer . Just want to try to minimize the number of my embarrassing sub-optimal decisions.

Read Answer Asked by Adam on July 13, 2015
Q: I’m hoping to add to some positions in the next couple of months with summer-time volatility. About a year ago I started a long-term position in Altagas at about $45.75. I’m hoping to add about 50% more shares to fill out this holding, and – with ALA’s chart continuing to slope downwards, as well as the possibility of a U.S. interest rate increase in September – I picked a bid price of $35.86. Is it realistic to think ALA has a little more to go down or am I just getting too cute in the bid process?
Read Answer Asked by Peter on July 13, 2015
Q: We are retired, elderly, and need the dividend income we get from our portfolio as below:

Pipelines, 8.51%: PPL, TRP
Utilities, 12.52%: BEP.UN, EMA, RNW
Telcoms, 9.11%: BCE, T
Banks, 22.47%: BMO, BNS, CM, RY, TD
Reits, 13.38%: CUF.UN, HR.UN, MST.UN, SRU.UN
Industry, 22.81%: BIP.UN, DH, NFI, NWC, PKI
Cash, 11.2%

I would like your opinion on adding one or two steady eddys that pay a decent dividend along with some growth potential. Would FTS and TRI fit our needs, or do you have better suggestions. Thanks, Ted
Read Answer Asked by Edward on July 13, 2015
Q: How can a company have a negative debt to cash flow ratio?
What debt ratios do you use when evaluating a company? I use debt/equity, debt to cash flow, and debt to ebitda. For different industries do you use different standards for debt and where would a person find what ratios to use on what industries? Thanks
Read Answer Asked by Rob on July 13, 2015
Q: Hey folks, you have an update out on AFN rating it a B. Could you please compare AFN to AGT. Which is more stable? Which has more growth? With AFN at B, what would you rate AGT? Thanks for your comments.
Read Answer Asked by Noel on July 13, 2015
Q: My question has to do with how to determine if I am doing a good job with my investments and am, in fact, outperforming in some way. I am wondering how I should go about establishing a target rate of return for my portfolio, assuming you think that is a good idea. I know that many use the S&P TSX Composite as a proxy but that doesn't really represent the make-up my portfolio so I may be comparing apples to oranges, I currently hold a mix of most of what is suggested in the various 5i portfolios, as well as some international things as well.

Is is best to stick with the TSX, simply because if I can't beat it I should join it or is it best to go through the percentage makeup of each area I invest in and use a weighted average percentage to arrive at an overall number?

My concern is that even if I may "outperform" the TSX but on a risk-adjusted basis, I may actually be underperforming.

Really appreciate the insight.

Paul F.
Read Answer Asked by Paul on July 13, 2015
Q: Hello Peter and Team,

Could you please advise me on couple of good websites/places where an individual investor could get earning estimates and how much does it cost on an yearly basis?

Best regards,
Febin

Read Answer Asked by Febin on July 13, 2015
Q: Hi Peter and 5i Team,

I am interested in buying KO. I have never purchased American or international stocks, so it is all new to me. Am I better off purchasing it in my TFSA discount brokerage accounts or in my non-registered (regular) discount brokerage account? What are the tax implications for both scenarios?

Thanks for your help,

Terri.
Read Answer Asked by Terri on July 13, 2015
Q: Hi Peter, How do you feel about the railroads right now? Which if any would you buy at these prices?
Read Answer Asked by Jeff on July 13, 2015
Q: If Canada's bank rate goes down on the 15th I am assuming Cdn bank stocks will go down and Reits will go up. How do you think it will affect the various sectors on the TSX?
Read Answer Asked by Arthur on July 13, 2015
Q: Hi guys,

I'm looking at adding a growth stock with a modest yield to my RRSP over the next few months before October. Why would you recommend at today's prices from the following: Constellation Software, CCL Industries, Brookfield Asset Management or Magna. I know the companies and sectors are all a bit diverse, but I have room to add to all of these sectors without being overweight. I'm leaning towards Magna, but I wanted your opinion.

Thanks,
Jason
Read Answer Asked by Jason on July 13, 2015
Q: Good Morning 5i team: I'm hoping you can enlighten me in regard to the way in which rate reset preferreds are priced at the time of reset. Specifically, the calculation of the 5 yr GOC bond rate (assuming that's the benchmark involved, which it is in all of my preferreds). An example may help. The prospectus for ala.pr.e says that at reset (12/18)the rate will be reset to "a rate equal to the sum of the then five-year Government of Canada bond yield plus 3.17%." So, my question is this: Is the GOC 5 yr bond yield a fixed number, or does it float with trading? Thanks for your help.
Read Answer Asked by Donald on July 13, 2015
Q: Whatever happened to Legumex? I seem to recall a few years ago (2012?) that a few analysts were all over this stock as a growth company with unbounded potential. Ever since, there has been hardly a peep or a pea bean out of them. Why is it failing so miserably, given the (presumably) untethered growth in this sector -- i.e, pulses. I never owned it, and was always waiting for something to happen. Is it likely that anything will ever happen with this stock? Thank you.
Read Answer Asked by Sylvia on July 13, 2015
Q: Please comment on my logic ( or lack of ) on this. When and if interest rates ever start the up tick it would be a sound defensive position to have some funds in a preferred share ETF such as CPD that has a significant number of rate reset shares.

Any other preferred Share ETFs you would prefer? I am a middle aged investor building an income portfolio for retirement down the road.

Many thanks

Paul
Read Answer Asked by paul on July 13, 2015
Q: Peter and His Wonder Team
As you have stated... historically you told your colleagues never to let you buy BB because you could never figure this company out. Well I am in your camp...I have never bought BB for the same reason. Analysis and predictions have been all over the map which explains its roller coaster volatility. However as it is heading to a new annual low I am looking at it with interest...I know Chen has done a good job and the company still has assets and potential...I read about a possible Android type phone. Please give me your current assessment... Do you think this is a $15.00-$20.00 stock at best? Or do you think that in the end they will be sold? Or is the future of this company too unpredictable with the risk out weighing any potential gains?
Thanks for your consistent high quality service...
Dr.Ernest Rivait
Read Answer Asked by Ernest on July 13, 2015
Q: I have enjoyed good profits with this stock and good returns. I see there are no questions logged with 5i and would like to know your thoughts on this stock. I expect it to do well moving forward, but based on other sector stocks, am wondering if it's time to move on?
Read Answer Asked by Eric on July 13, 2015
Q: You rate AFN & XTC as B and WSP as B-. Do you prefer one company over the others at the present time? Which company has the bigger capitalization and share float?
WSP has been acquiring smaller engineering companies and I heard on the grapevine that some of the "Principal" level engineers in one of the acquired companies are thinking of leaving. I am in the engineering & construction business myself. Turn-over in this line of work is not unknown however generally "principals" don't leave. (Just small fries like me tend to hit the road).
Thanks
Read Answer Asked by James on July 13, 2015
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