Investment Q&A

Q: re: PNE

Is it just me or does Michael Campbell always have a very compelling story.

In looking into it further, there is no question Mr. Fink knows what he is doing. And now he is apparently doing the same thing again with Pine Cliff.

Has anything happened or has your opinion changed - for the better or worse- since your last comment on PNE July 28?

Thanks for all you do

Gord

Q: Hi Team,

I have a number of quality US$ equities in my portfolio. I would prefer to hedge the US$ exposure if I could find an affordable way to do so. I tried a 2X leveraged ETF a few years ago but it had a 2.5% MER and I seem to recall that the leverage doesn't work well with volatility. Do you have any suggestions on how I can hedge the exposure? Thanks

Q: I tried to submit something similar to this yesterday but I think it timed out so if this is a duplicate just ignore.

I think I can offer something to Jeremy's question on Questor. I work in oil and gas.

There are 2 reasons operators use incinerators:

1. To replace a flare of unsellable natural gas for public concern or environmental responsibility (hide the flame from view, get more complete combustion). There is no monetary benefit to incineration in this instance - it's an added cost. Reasons for doing are public image, environmental responsibility, and sometimes regulatory.

2. Using natural gas as fuel to burn up an undesired product such as hydrogen sulphide. This is the application where the payback Questor talks about comes in to play through using less fuel.

The North Dakota example would be primarily category 1. This also probably represents the big growth area.

Questor's marketing materials don't differentiate between these applications clearly. They could also probably do more to show how their incinerators are better than other ones and not just flaring.

I agree with Jeremy's point on not seeing a clear catalyst for growth after a number of years of slow growth but am relying on the 5i analysis here that the growth is materializing. Despite being sceptical for that reason, I do hold QST as I believe they are a supplier of choice in the field.

Hope this is helpful to some.

Q: HI Team, can you please give me your thoughts on Questor's report on the 28th?
Thanks

Q: I see the techinicals on oil have broken down with a next support at $86. Would this be a good time to step out of SGY or partialy step out due to its normal volitility as a junior?

Q: Would you please help me understand the trading volume for Petrowest? The average volume is over 8 million and yet in the last few trading sessions the volume has been extremely low.

Thanks so much

Q: Hi team:
one of the recent question by an investor was the beta for the Canadian banks, it is below 1.0 (the TSX is 1.0) which is good for a conservative investor
In my income portfolio to generate dividends, I have alot of REITS as well as Piplelines such as IPL and PPL which could be classified as utilities
I wonder what the beta would be for Canadian REITS as a group
and also for pipelines such as IPL, PPL and TRP/
Many thanks,
Michael

Q: What is the best 1 or 2 small to mid cap stocks to play zinc deficit and zinc price rise. Dave

Q: Hi folks: Are Questor's earnings out yet? If yes, how do they look?
Charles

Q: peter, just to let you know, I hold 20000 css that we will not tender. I phoned rbc and they said doing nothing means you are not tendering.
I could buy 20000 more to help the cause, what is my downside. 20 cents. what do you think. dave

Q: Hi,

Would u consider RUS a long term hold 3-5 years or more of a cyclical play?

Thanks

Q: Cominar REIT (CUF.UN)

Hi Team,

This is a follow up question after your reply today about Cominar's purchase of new assets yesterday. I see this morning CUF.UN is down ~1.23% suggesting the market doesn't like the deal so much. I was wondering if it's because the cap rate for the new properties is 6.5% but CUF.UN's dividend is 7.64%, suggesting the payout ratio of 74.81% would have to rise or the dividend would have to decrease all other things being equal. Is this a correct interpretation or am I off base? Your advice and knowledge is greatly appreciated and is helping me to learn so much. Cheers. Michael

Q: When will the next report on Capstone(CSE) be available as I notice the last one was in March 2013? Would the rating still be a C?

Q: Good morning: Your report on Questor states that it is subject to
seasonality. What will be the beat "season(s)" to buy the stock?
Charles

Q: The revenue numbers for BKW reported in the Financial Post don't make sense: only $1.1bb vs 3 times that for THI which has one third of Burger King's location numbers. If the combined company is going to be #3 worldwide, revenues would have to be a lot closer to the SBUX level of $16bb. Is it possible the revenue numbers are small because they reflect only franchise fees and not total sales? I note also that 2013 net earnings for THI are twice those of BKW which doesn't appear right for an acquirer; what is the potential for the new company in generating growth here? Thanks, J.

Q: What percentage do you recommend for small cap in a portfolio? There was a comment from someone who asked if they should trim DHX in which they had a 4 % weight and you recommend that they should trim.
Thanks
Dolores

Q: I noticed your aug 12 bloomberg article on AVO posted. I am under water on AVO & wonder if you are bot into the presidents strategy of short term pain for long term gain or is he over optimistic & have it wrong. In other words, is this a good time to buy into a real growth story a year or 2 from now or is there any chance they will see competition by then? On a side note, I believe there is a huge demand for more survelience and an acceptance from the public.
You also posted a list of 90 charts, first one being the SSEC-I which has already passed the marker the auther suggests will mark a breakout. Can you elaborate on your feeling of whether his assumptions are correct & what sectors this would impact, IE; commodities-base metals, oil, etc??

Q: Hello Peter,
I am not clear as to why the market is paying 89 per share(current share price) for Tims when the overall deal will provide an investor more than 89 per share. Can you please comment? From the various answers provided, it appears you are in favour of holding onto the Tims shares. Am i correct in my understanding? Also, what is your view on DHX at this point as it has gone up alot in my portfolio. It does not represent more than 4 percent of my weighting. Should i trim or hang in there? Much appreciate it. umed

Q: Hi, there. I currently own Temple REIT (TPH) and am thinking of selling it. Can you suggest another Canadian REIT. Thank you.

Q: THI represents 3% of my overall portfolio, and it happens to be in my TFSA. I am up 44%. There are various options available to THI shareholders , in addition to selling the stock now.

From tmx.com
Under the terms of the transaction, which has been unanimously approved by the Board of Directors of both companies, Tim Hortons shareholders will receive C$65.50 in cash and 0.8025 common shares of the new company per Tim Hortons share. Based on Burger King's unaffected closing stock price as of August 22, 2014, this represents total value per Tim Hortons share of C$89.32 and based on Burger King's closing stock price as of August 25, 2014, this represents total value per Tim Hortons share of C$94.05. As an alternative to the default mixed transaction consideration described above, each Tim Hortons shareholder will have the ability to elect to instead receive, for each Tim Hortons share held, either (i) C$88.50 in cash; or (ii) 3.0879 common shares of the new company, in each case subject to pro ration.


THI stock is trading around $89.32 now, but if you take the cash and stock option based on yesterday's closing price of BKW it is supposedly worth $94.05. And if you take shares in the new company it is supposedly worth $100 (according to BNN).

What option is best for an investor in THI? Should I wait for the deal to close later this year, or sell now?

Paul J.