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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: I am a 70-year old retiree interested in purchasing INE.PR.A as a long term investment for income. I am more interested in preserving capital than capital gains. Although this security is rated only “4h” by the rating agencies, Innergex would seem to have good business prospects and sufficient cash flow to continue paying dividends on their preferred shares. What do you think?
Read Answer Asked by David on August 28, 2023
Q: Hi 5i,
I'm real confused by all the goings on with NFI, and all the conflicting views, and do not understand this world of high finance at all.
I think a private firm just bought 38 million shares at $10.10, giving NFI cash to draw on to pay down debt - and that private firm might actually have been a large creditor, so perhaps it gets paid back with some of its own money ...?
Be that as it may though, I expect it put up that kind of money believing it will profit handsomely, and I wonder how it would plan to do that. Will it hold the shares until they've appreciated significantly and then sell them, or would it have something more sophisticated in mind?
National Bank presently rates NFI as an outperformer with a $15.00 target, and Morningstar pegs its fair value at $21.15 and describes its financial health as "moderate". CFRA meanwhile dubs it a "strong sell" with negative valuation, quality, growth, street sentiment and neutral momentum.
I can't make hide nor hair out of all this contradictory information, but I do get the sense that a buy in now might be more than just raw speculation - is it possible that NFI right now represents a compelling value story, or is that just wishful thinking?
I believe your opinion has recently been very negative and you've dropped coverage, but do any of these recent events serve to change your view, or would you still recommend staying very far away from this one.
Thanks 5i,
Peter
Read Answer Asked by Peter on August 28, 2023
Q: Just realizing that the BIP.U I hold in my CD cash account is not tax favorable.
I plan to buy BIPC. Then sell BIP.U a couple of days later, at a tax loss. Assume that will be kosher, and that I can claim a tax loss?
Secondly, I notice that this company pays dividends in US $. I could buy it in my US$ account. Does that make better financial sense? I would lose the dividend tax credit, but perhaps save on currency transfer fee each Q?
Thanks for your timely responses. This Q/A feature is what I love about 5i!
Read Answer Asked by Marcia on August 28, 2023
Q: Hi team. When I asked you about VST in 2021 you thought it was a decent mini-cap. Things have not gone well since. The audit of the December 2022 financial statements indicated the company's ability to continue as a going concern was in question. The last few weeks the CEO has been buying shares almost daily and the share price has risen from 15 to 17 cents over the last two weeks. I am way down but it is only a small position. Run or hold?
Read Answer Asked by Ken on August 28, 2023
Q: Morning 5i,

Here's my burning question which I'll frame as a hypothetical;

Say a fella had 2500 shares of CTS in a TFSA with a BV of ~ $20K and a current MV of ~ $6.6K (hypothetically speaking ...). Taking into account the prospects for CTS over the next 3 years (the fella can afford to wait it out but doesn't like seeing all the red every time he looks at his TFSA account) would it be advisable to liquidate the CTS and invest the ~6.6K elsewhere and, if so and importantly, what 'elsewhere' would you invest in to get a return on the money (cap gain and/or dividends) that will outpace what it's likely to do if left in CTS, all without unduly risking compounding the problem?

You know, hypothetically speaking ...

Thanks 5i.

Peter
Read Answer Asked by Peter on August 28, 2023
Q: Hi 5i,
I'm mindful of your answers to recent questions about AP.UN (lukewarm response at best) but I do wonder;
Employers are said to be insisting more and more that employees get up, get showered, get dressed and get in to work at the office.
Pre-pandemic AP.UN was in the $50.00 range, and even in the midst of COVID it didn't drop as low as it is now - presently units are selling for $20 just as they were a decade ago. If it's accurate that working from home is on downslope, is there an upside for AP.UN that's not reflected in its current price - was it worth $50/unit in early 2020, or was that unsustainable even without COVID - and do you see any scenario where it might get back to, say, 2/3rds of its early 2020 value?
And just generally speaking - do you think office REITs are out of the woods if current trends continue (and if interest rates come down over the next year or so)?
Thanks,
Peter
Read Answer Asked by Peter on August 28, 2023
Q: Hi 5i team,

Your answer to the question asked by Lisa on June 27, 2023:
"we prefer one-month options at just above (or below for puts) current prices. The reason is that many estimates mis-judge short term volatility. In a 'normal' year (not the past three!) stocks do not really move that much, on average, in a month"

1. Can you provide more details or materials on this strategy?
2. Are these one-month options for buying puts or selling calls?

Best,
Matt


Read Answer Asked by Matt on August 28, 2023
Q: I understand that you don't follow chinese companies, but I was hoping that you could help me understand the mechanics around the split of BABA into its 6 business units.

If one of the business units has a successful IPO, do BABA shareholders get stock dividends of the new publicly traded company? Or does it remain as a subsidiary with BABA as the majority shareholder?
Read Answer Asked by Gerald on August 28, 2023
Q: Retired investor looking to reduce bank holdings. Currently have ~1/2 positions in TD and BAC and full positions in NA and RY. I would appreciate your input. Could you rank, giving rationale, ATS, CLS, ABT, HST, LEN, for upside potential? Would you recommend starting 1/2 positions (or easing into) any of them at this time? Please take credits as you see fit. Thanks.
Read Answer Asked by Harvey on August 28, 2023
Q: What 3 US stocks would you recommend for TFSA for 5+yr timeline? Not concerned about sectors. Just the 3 best growth names that YOU would buy. I have GOOG and NVDA at half positions. Thanks!
Read Answer Asked by Marco on August 28, 2023
Q: In a recent question you answered " we think one of the most important skills for investors who choose to own high-quality compounders is the willingness to hold them through thick and thin, even in periods when they appear to be fully valued (or slightly overvalued)."
With this in mind could you please give a list of canadian high-quality compounders that you would recommend initiating a position in and holding through thick and thin.
Could you please include their sector designation and yield.
I am interested and low yield ones for a non registered account but would also like to see your higher yield ones too.
Thanks

Read Answer Asked by Anna on August 28, 2023
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