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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: Hi Peter, you articulate well your reasons why 5I does not issue target prices, and I agree with same and it makes perfect sense. I note brokers are normally "behind the curve" when setting or revising target prices. Usually it occurs right after earnings. If there is a big earnings beat, miraculously the target price is revised down, and conversely if it is an earnings miss then they revise down often. When target prices are set without reference to recent quarterly earnings, aren't they set using some valuations method, ie. price/forward earnings, price/book, price/affo etc. I don't buy or sell based on target prices, however is there not some limited value in them in that at least it allows one to examine the price based on a valuation method, and at least pay attention to the stock. And as to a potential purchase, if a stock is at its target price(s) should I not at least confirm there is no obvious reason why the stock cannot go up from there? I do keep in mind your advice that generally if nothing has changed fundamentally there is usually no reason to sell. Thanks for the great advice 5i provides. Bill Y.
Read Answer Asked by Bill on July 30, 2014
Q: If you follow FNHC in the US, it just reported excellent results and yet the stock is dropping like a rock - what is it the market doesn't like?
THanks,
Murray
Read Answer Asked by Murray on July 30, 2014
Q: a comment

You can post this in the forum if you like Peter and team...

First off, enjoyed your session on Market Call. Very well done.

More importantly, what I really took from it was the consistent 5i message which has now repeatedly (we must drive you nuts) mentioned the philosophy of not using any kind of "target pricing" expectation/strategy. Ironic for me personally, considering just yesterday I asked where you thought Amaya might end up. I will be doing my very best moving forward to not ask about target prices although I admit, it will be tough.

I appreciate more than you will know the lessons you consistently emphasize - faith in metrics, long term investing, and not trying to invest/divest based on target pricing and/or timing the market. All things every once in a while I am guilty of not observing.

Have patience with me 5i team. I will try and do better.

Thanks for all you do

Gord


Read Answer Asked by Gord on July 30, 2014
Q: CJ-t Cardinal Energy
I bought CJ in April and it has moved up steadily.
Now there is news of an acquisition, equity financing, and
dividend increase.

I'm considering buying more. Your advice, please.

Read Answer Asked by claudette on July 30, 2014
Q: Peter,
I know it is repetitive on my side and repetitive on your side..
but, tell me even this type of information is not even make you blink?
''Corporations are now the single largest buying source for U.S. stocks – authorizing buybacks of their own stocks to the tune of $754.8 billion in 2013 alone.

And it’s a long-term trend. According to Birinyi Associates, for calendar years 2006 through 2013, corporations authorized $4.14 trillion in buybacks of their own publicly traded stock in the U.S. — raising the question, just what kind of a bull market is this?

JPMorgan Chase, the largest U.S. bank by assets, has turned share buybacks into an art form, buying back a whopping $17,945,000,000 of shares from 2010 through 2013. In just the calendar year of 2011, JPMorgan spent a stunning $8,827,000,000 on stock buybacks''.

There is debt attached to that, it is not gone! 4 trillions buyback!!
To me this is madness in proportion of the 2000 and 2009 madness.. So ''they'' think they can get away with it this time.. Of course attached to that is the explosion of derivative (http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php?utm_source=Triggermail&utm_medium=email&utm_term=Markets%20Chart%20Of%20The%20Day&utm_campaign=Moneygame_COTD_072914) leverage but everybody is on the same side of the trades as usual. Give me a serious black swan and you still do not worry?

Thank you for having again the patience to explain the reasons why you are so little worried.
CDJ
Read Answer Asked by claude on July 30, 2014
Q: BDI - should we be concerned with the press release and decline?
Read Answer Asked by Greg on July 30, 2014
Q: Can You call Zargon's (ZAR) latest report?The share price dropped following the news. I would appreciate your comments. Thanks for all your help.
Read Answer Asked by Donald on July 30, 2014
Q: I read this morning that CGI was able to generate 1.1 billion of cash flow, surprising analysts positively. They reduced their debt by 500 million. Earnings per share met expectations. Valuation is at 16.5x trailing earnings. Now that the debt and cash flow concerns are gone, it seems to be the perfect time to buy. What do you think about earnings?
Read Answer Asked by Matt on July 30, 2014
Q: Hi Peter and Team, regarding Mandalay, MND, any further thoughts or updates since your last response in March on MND? Thanks!
Read Answer Asked by Hussein on July 30, 2014
Q: WIN Wi-lan of course! Numbers are in. Market likes. Whaddya think? Skip Q if already asked.

TIA
Read Answer Asked by Gerald on July 30, 2014
Q: hnl, With the release of 2nd quarter 2014 results (released yesterday) below analyst expectations, what would you suggest, keep the stocks or sell it off now and wait for a turnaround in two quarters.
Read Answer Asked by Vinod on July 30, 2014
Q: Could I have your thoughts on AAA.would you say its a buy now and a potential take over candidate?
The Israelian company has a big stake.
Thanks
Read Answer Asked by Josh on July 30, 2014
Q: Hi Peter and Team,

What are your thoughts on Axis Capital Holdings, AXS.US
Read Answer Asked by Graham on July 30, 2014
Q: Brookfield asset management has a lot of subdivision.Is it better to own BAM for growth or different subdivision ( power,real-estate and etc.)?Thank you,ebrahim
Read Answer Asked by ebrahim on July 30, 2014
Q: Hello Peter,
Thanks for your prompt replies and expert advice. I was listening to BNN last night, and interesting points were made. I have two questions:When companies buy back stock, the EPS goes up which is good for the stock; however, does it not reduce the book value. I was looking at CNR and the stock is trading over 4 times book. If this is the case, how is it that CNR keeps ticking higher (is it because it has a high barrier to entry and investors feel there is safety in the stock). Second question that came up is that the bank stocks have not hit a top. What metric would suggest a top in the banks? Is it if the PE goes over 15? Thanks again
Read Answer Asked by umedali on July 30, 2014
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