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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 5. A pipes question:There is chirping about rotating out of pipelines when interest rates start to return to more normal levels. Pipes have been fantastic for anyone who's held them for the past 5 years. My take is that higher rates will raise cap costs no doubt but that higher interest expense is an expense like any other, and the pipes will pass the higher borrowing costs on to their clients, just as they do with any other expense, in order to maintain profitability. It wouldn't surprise me if interest fluctuations are covered long term contract pricing. So my question is what is your take on pipes in a raising rate environment? Thanks 5.



Read Answer Asked by Glenn on July 21, 2014
Q: Hi team, I was reading your opinions on CHB and XHY, some of which are dated back to February of this year. I am looking at buying a fairly large position (25K) in one or both of these as part of my fixed income section of my portfolio, would you still recommend either of these funds? Or should I split my purchase or take a single position, or are there better options? Thanks for your time.
Read Answer Asked by Ray on July 21, 2014
Q: I read your comments on tax treatment of US ETNs with interest. I hold ETNs in both my taxable corporate investment account and in my RRSP. Am I subject to both Canadian and US taxes on the profits or do I just pay tax in Canada on the taxable account. I assume there are no taxes on gains from any stock sale in an RRSP. Thanks.
Read Answer Asked by Grant on July 21, 2014
Q: Regarding your recent blog on doubling down, would you care to share some potential candidates?
Read Answer Asked by Richard on July 21, 2014
Q: Interesting article "Going Big". How would you suggest someone with the right risk tolerance approach such a strategy ie., would you start with say 5 or so stocks and double up with momentum by maybe selling a weaker performing stock? What stocks might be candidates currently? Thanks, Mike
Read Answer Asked by Mike on July 21, 2014
Q: hello 5i:
I recently began acquiring HWO, and have a small position. I've read your answers and opinions of it, and find its multiple to be "enticing", when I see very little debt, ROE of 23.2, good free cash flow, etc. Can you advise what % of shares is held by insiders (this is very important to me) and what grade it would get, back of the napkin, if it weren't so small. What percentage of the production is oil, what it gas? A lot of conjecture there, I realize.
thanks
Paul L
Read Answer Asked by Paul on July 21, 2014
Q: I will be registering a LIF in September but will not initiate any income till January 2015. My max withdrawal is 6% a year increasing each year unless I can prove that I can generate more income than the 6%. I have chosen 6 stocks from the Income Portfolio to attain this goal. CVD,XHY,SGY,VNR,BEP.UN,and added PKI. Would you be comforatble with this strategy. (My RRSP covers the Growth Portfolio 100%) As always TY.
Read Answer Asked by Alan on July 21, 2014
Q: Peter
What are your thoughts on the new Vanguard FTSE All World Ex Canada Index ETF VXC?
Ae there any other Canadian ETF's that you could recommend that are the same as VXC and why?
Cheers
Ron
Read Answer Asked by Ron on July 21, 2014
Q: Hi Peter & all
Most enjoyed your article in the FP this A.M.& concur with your thought process.Please give 3 stocks you believe warrant doubling down in for future growth. Thanks & am enjoying all parts of 5i Research.
Read Answer Asked by WIB on July 21, 2014
Q: Many of the questions asked by 5i members pertain to Canadian oil and gas companies. That being said, I'm increasingly hesitant to consider buying stocks in them even when you rank some of them very highly.

It appears that the US is fast approaching the point where it will be energy self-sufficient given its ever-increasing domestic oil and gas output. I may be missing something but I suspect that American buyers will soon be cutting back on their purchases of Canadian oil and gas products. Making matters worse for these same Canadian companies is the fact that the infrastructure in Canada is not yet in place for exporting their production abroad.

Based on my limited understanding of energy market dynamics, the near future for even the best Canadian oil and gas companies seems very bleak and, perhaps, now is not the time to buy their shares.

Is my reasonning correct or am I missing something?
Read Answer Asked by Robert on July 21, 2014
Q: for some reason you guys do not seem to want to do a growth portfolio,you keep saying you might do one in the future,i think a great many of your subscribers are under 50 and would appreciate a growth portfolio, since a growth portfolio will probably be much more volatile than your model and income portfolio and would give the younger people a lot more time to overcome the dips a growth portfolio might, I repeat might bring.
having said this could you please give me your top 5 picks for growth in the next year. thanks. dave
Read Answer Asked by david on July 21, 2014
Q: Is there enough of a body of information about Trupanion (trup) or similar companies to make a reasonable investment,people seem to be willing to spend unlimited amounts on pet care,Thank You.
Read Answer Asked by rick on July 21, 2014
Q: I hold 6.25% TD.PRK-T preferred shares which will mature on July 31. I have the option of converting them into Series L, non-cumulative, floating rate issue 4.33% + the average previous 90 days T-Bill rate. Can you please advise me if this is a good choice assuming that interest rates may begin to rise in the next 1,2,3 years. Under what market circumstances would the shares drop below the $25.00 PAR value, and would this be a major concern given that inflation is now hovering above 2% and that interest rates will remain at their current levels this year and potentially be on the rise starting sometime in 2015. For a preferred share, can you suggest a better alternative that would provide similar returns but offer a lower risk.

Also is it too speculative to buy ECI now that a takeover offer has been made and even assuming that the takeover does not take place.

Thank you for your advise,

Joseph
Read Answer Asked by Joseph on July 21, 2014
Q: hi peter; what is your opinion on rmm.----thanks brian
Read Answer Asked by brian on July 21, 2014
Q: Good Morning... I have a considerable investment in GTAT.US ... for some reason I am under water despite the good press and the prospect of Sapphire Glass taking over Gorilla Glasses throne . Will this just be a bouncy ride or can you see a crash ?
Read Answer Asked by Thomas on July 21, 2014
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