Investment Q&A

Q: Hi Peter,

I found the info you provided to an investor question previously on Solium Capital (T.SUM) to be very interesting and led me to do more digging (an equally valuable part of this service!). Indeed Solium is carving out an ambitious and interesting niche for itself as the global 'go-to' organization for a wide swath of services regarding equity compensation (e.g. even extending past software to include brokerage, trust etc.)

Some factoids that I found of particular interest - 93% of revenues are recurring; management owns approx. 35% of outstanding shares (all acquired via cash purchases as there are no 'founder shares') and so very much aligned with shareholders.

SUM has finally attracted an analyst (Pardeep Sangha from PI) who has set a $4.50 target in his Jan 22 report. His basis for the price is that "Solium is currently valued on an EV/Sales ratio of 1.7x and an EV/EBITDA ratio of 7.1x FY13 estimates. Meanwhile, Solium’s peer group, is currently valued at an EV/Sales multiple of 3.4x and an EV/EBITDA multiple of 12.6x consensus FY13 estimates."

Question: is his EV methodology perhaps more useful than using a straight P/E analysis for assessing this type of high growth company.

Sign me,

A happily renewed 5i subscriber!

Q: Hi Peter, I would like your opinion on XTR, XDV and XEI
From ishares website XTR is 60% bonds, XDV has 30 stocks with 60% financial and XEI has 75 stocks with 30% financial and 30% energy. Going forward and for income in an RRSP, I favor XEI. Do you agree? What is your recommendation please? Is now a good time to get in?
Thanks a lot.

Q: Hi Peter, EDV ,Endeavour mining had some splendid production numbers recently. I find this stock very undervalued. Would you care to comment on it? Sincerely,

Q: Hi Peter can you give me your outlook for "QEC" is there any hope for this one, I've held it since Nov. 2010 or is it time to let it go.

Q: I'm curious how you decide which securities you will report on next. Ones that you like? Ones that are interesting? Random selection?

Q: I previously asked about a replacement for Bloomberg's 5-yr Breakeven index USGGBE05:IND (no longer available for free). I used this for future inflation expectations. I think I have stumbled on a replacement here ==> http://research.stlouisfed.org/fred2/graph/?g=efF
Comments ??

Q: I'd like your opinion on a choice between Pembina or Inter Pipe for growth and dividens ?
Which rail company will have the most upside with oil shipping?
With a 5 year window for both.
Thx
Guys

Q: This is a follow-up to the answer to the "hold winners vs sell part of winners which are too large a percentage of your portfolio".

It is often hard to sell any part of something which is doing well and lookss to be doing more of the same in the future.


What I have done instead of selling to bring the percentage in line is to place a trailing stop on the amount which you would have to sell to bring the diversification back in line. Obviously trying to get the best of both worlds.

Would you have any comments on the validity of this strategy?

Q: Hi, guys. question: why would kingsett chose to buy up to 5% of primaris' shares now? even with this 5% block, I find it unlikely that their bid would receive enough support to go through. seems like an inefficient use of cash buying primaris in the high $26s and $27s when the value of pmz.un's shares based on hr.un's current share price is lower. seems to me like kingsett could get an better immediate return buying hr.un. your thoughts are always appreciated.

Q: SH-N With the US market having been on an upside ride for a while and at fairly lofty levels, does the risk/ reward ratio of using SH to short the market in order to protect myself against losing some of my gains seem like a reasonable trade? SH appears to be at about a 5 year low.

Q: hello 5i:
I've read your answers to previous questions regarding Cameco and the uranium industry (lukewarm would be my description of your opinion), and am wondering if your opinion for the industry has changed at all from November. I note that Japan has said that they will continue their nuclear program, and that China is planning at least 4 new reactor sites. I also read that demand already exceeds supply. Can I have your take please? Are my sources questionable?
thanks
Paul

Q: Hi team, over the last year I was having trouble finding individual stock to buy so I just slowly built up a fairly large position in XTR which is nearing 6% weighting in my portfolio. But quite frankly I have begun to enjoy the monthly income, so my question is in your opinion is the distribution sustainable, or should I sell a little off? I have it in my wife's RRSP and my kids RESP.

Q: Hi everyone a few years back I took a position in Leisure world LW at about $10.00 in my TFSA. Some TV experts seem luke warm to this REIT, saying that making money in senior cars is tough. My view is that they are in a high demand area so I am still holding. Is the senior care sector a bad investment area, or should I just sit back and collect my 7% until I need to move into one of their facilities?

Q: Hi again, I went into Game Host GH several years back at about $11.00 looking for a little dividend income, which they have consistently delivered. However today it broke through $13.00 and I am still holding. They have never missed a divided payment and their Casinos and hotels seem fine, so do I just sit back and collect or sell? I would be interested in your insight.

Q: Hi Peter
I`m considering positions in CFN , MCB , and MTY at this time . Do you still consider these companys solid and worth investing in, in 2013 .
Thanks
Bill

Q: Hi Peter and Team,
Thanks for a great first year of interesting and profitable investment advice. I will be renewing soon and look forward to the coming year of 5i reports.
My question concerns what seems to me to be contradictory advice having to do with portfolio rebalancing.
My approach is both capital gains and growing income for retirement. I have 20 stocks in my portfolio with what I consider to be good names such as STN, TRP, ALA, ESL, SYZ, AYA, BCE, etc. To me, some of my holdings are just getting rolling. If I sell back to 5% every time there is a rise in the share price it seems as if I am eroding my possibilities of future price and income gains (especially given the good prospects of dividend increases).
In a recent answer you said that an investor should not sell a good stock just because it is up. How do you reconcile these two assertions? Thanks again for the excellent service and have a great 2013. Rob

Q: 3% drop in 30 minutes at end of trading day ?
Does someone know something we don't know ?

Q: hi, do you think Sylogist,[syz]would be a solid long term holding, say 5-10 yrs, for a 59 yr. old retiree, thanks?

Q: Osisko Mining (OSK) is down over 6% today and hit a low of $7.06. I can't find out why? Do You have any clues and would you recommend it at this price?

Q: I will soon retire. What do you recommend for my TFSA ($25500) for income? Keith