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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: Peter and Staff
For a long term small $ hold, would you please rank them 1,2 and 3 with logic........and also if they each are BUY,HOLD or sell.
Thanks for all you do
Read Answer Asked by Dennis on October 16, 2015
Q: I am now trying to clean up bond holdings in the portfolio they used to manage. Some like Gasfrac Energy bonds are no longer recoverable, but there are few other bonds/names that concern me. These are TransAlta DDCALL 7.30% 22OCT29, SIRIUS XM 5.625% 23APR21, AUTOCDA SR NT 5.625% 25MAY21, and CORUS ENTERTAINMENT 4.25% 11FEB20. There are also coupons/residuals from Bell Canada with maturity in 51 and 54. After Gasfrac, my main concern here is that these companies may not even exist on maturity dates. Do you see any of these bonds or coupons as high risk? What happens to a bond if the company is bought by another company? Would it be a better idea for me to sell all individual bonds (there are 20+ in my portfolio) and buy a bond ETF instead? Thanks for your help!
Read Answer Asked by Michael on October 16, 2015
Q: Hello team Can I get your thoughts and analysis on nvda. It's been on a sharp rise recently. Do you still see some good growth in the stock over the next yr or so. What would be a good entry point now?
Read Answer Asked by pietro on October 16, 2015
Q: Hi 5i: With PHM shares under $0.60, their market cap is down to about $200M. Isn’t that roughly equivalent to their annualized revenue guidance based on their expected run rate at the end of the current calendar year? My understanding is that, but for their acquisitions-related expenses, their underlying business has been operating profitably for some time. Have I got that wrong? It seems like some very significant upside potential is being compressed within this story. I understand that it is a ‘show me’ story since the management changes and insider shareholdings shuffle. I also understand that there is some shifting of the balance toward organic growth opportunities and possibly less dependence on acquisitions in the plan to maintain the growth profile going forward. I see the big question (and risk) as whether the new management can deliver on its promises, to at least maintain the growth level achieved by the prior management. If they can deliver on the numbers guided to, wouldn’t PHM also be on its way to becoming a very compelling ‘value’ investment? Thanks!
Read Answer Asked by Lance on October 16, 2015
Q: Hi Peter and team,

You mentioned in your answer to Gordon "Bloomberg has a note indicating the debt issue is having a tough selling process, but the financing is there from the backers..." I just want clarification, does this mean if Concordia cannot sell enough of it's debt issue, the "backers" (financial institutions?) WILL FUND the remaining money owing so the acquisition deal can go through?

It is reasonable to assume that if the deal does NOT proceed Concordia's balance sheet would look more favorable in the short term? That they would then have cash on hand to wait for another acquisition or pay down debt? It would seem to me that either scenario (although very volatile in the short term) would be OK for a patient investor in the long run.

You quoted $4.25 USD per share earnings for 2015 before the deal; does Concordia not give an earnings price range (i.e.: $3.75-$4.50 USD) or just a single target number?
I'm also assuming that if the acquisition added say only $0.80 USD per share and you picked up the stock at $35 CAD which looks possible, and it got back to trading at 10 times earning, that you might see a 30%+ return in the next year. Or even a multi-bagger in the next 2 years? Not suggesting or endorsing to load up of course!

I have more questions on Concordia but I will put them in a separate submission. Please and THANK YOU in advance for answering all these questions as accurately and detailed as possible! I think your responses will not only greatly help myself but all your members who have been asking so many questions on this deal. I think I can speak for everyone when I say that I find your services invaluable and irreplaceable!!!

Thanks again, Shane
Read Answer Asked by SHANE on October 16, 2015
Q: What are your current thoughts on RUS? I’ve owned it for many years. Largest holding the avg cost is below $15. However, in one account the avg cost is above the current market and I’m thinking of averaging down. They announced that they are redeeming $174.34M of 7.75% debentures (all). What does this do to their overall debt situation? “The redemption of the debentures will be financed through Russel Metals' existing credit facility.”

I assume the market thinks that a dividend reduction is in the works. Currently yielding 7.21%.

This has been a good holding and the management was/is well respected. What am I missing? China syndrome!

Thanks.
Read Answer Asked by Dean on October 16, 2015
Q: Any thoughts on Garmin after they warned?

Thanks,
Heather
Read Answer Asked by Gregory on October 16, 2015
Q: What effect would there be on bond funds such as XHY, XBB and CBO if the US Federal Reserve went to negative interest rates? I hold all in a registered account.
Read Answer Asked by Ronald on October 16, 2015
Q: More a question about strategy. It seems my discount broker charges me around 2.5% for the exchange conversion when I buy a US stock, and probably the same for dividend payments and sells. Is there any way I can reduce these charges? Thank you.
Read Answer Asked by Kurt W on October 16, 2015
Q: Hi there,
Do you think this is a good entry point for XLV.US for a 2 year hold? Any opinion on this ETF?
Thanks,
Kerri
Read Answer Asked by KERRI on October 16, 2015
Q: For international diversification for 30% of my portfolio I am thinking about vxc, I know you have recommended vxus in the past but due to currency conversion (U.S. Rates). I was wondering about Vxc. What do you think about this ? Or should I bite the bullet and convert currency to USD? Can you comment on tax implications as well in registered and non registered accounts as well. Thanks.
Read Answer Asked by Shyam on October 16, 2015
Q: Hi Team
This company is setting new lows daily with increasing volume.What is the possibility of fraud?I rely a lot on insider buying and at these levels no insider buying.What would change your bullish view on this company.
Read Answer Asked by glenn on October 16, 2015
Q: Would you consider these three reasons sufficient to justify a switch from Pembina Pipeline (PPL) to Enbridge Income Fund (ENF):

(1) ENF's lower valuation on a p/e basis
(2) ENF's recent dip due to its equity offering
(3) ENF's fairly aggressive (and seemingly predictable) dividend policy

I have a pretty good capital gain on PPL but I also have some capital losses I can use to offset Pembina's gain. Do you think its possible/likely ENF can outperform PPL by around 10%?

Lastly, is either company more likely to be to be an acquisition target?

Many thanks.

John
Read Answer Asked by john on October 16, 2015
Q: I would suggest that Canoe got the better of this deal.Your comments please
Read Answer Asked by jim on October 16, 2015
Q: Hi Peter,

Being a retired person looking for safe dividends I have full positions in The Royal Bank, TD and Bank of Nova Scotia. I was wondering about doubling my BNS shares.

My thinking is that the dividend is safe and BNS will probably continue to be around a long time from now and the price I am paying for the shares seem to be cheaper than most other businesses at approximately 11 times earnings. Where for example to buy Telus is approximately 18 times earnings.

(as an FYI, I also have Railroads, utility's, pipelines, telecoms,oil, gold, reits, Life co's)

Warren Buffet says to buy things that are on Sale.

Just wondering what your opinion would be on this thought.

Thank you,
Charlie
Read Answer Asked by CHARLES LA on October 16, 2015
Q: Hi Peter,

Can I get your opinion on the $1.16-billion offer to acquire French aluminum components maker Montupet SA in a deal that expands Linamar’s global reach and customer base. The market doesn't seem to like it because the stock is down today.

Correct me if I'm wrong but LNR earnings are growing +30% yoy yet the valuation is only 10x 2015 estimates. I know the market is full of fear but this stock screams bargain to a GARP investor like Peter Lynch.

Read Answer Asked by David on October 15, 2015
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