Q: Hello Folks:
Unfortunately we have lost approx. close to 30% of our EMAX investment in the last few months. The current dividend is 16%; up from 13% upon purchase.
Should we accept this loss, move on or wait? Are there superior choices for this stock (we did primarily consider it an income investment, although a little growth potential would be okay). A goodly proportion of our investments are in energy; how do you view this sector and it's outlook?
Thank you for your most terrific service!!!!
brian
Unfortunately we have lost approx. close to 30% of our EMAX investment in the last few months. The current dividend is 16%; up from 13% upon purchase.
Should we accept this loss, move on or wait? Are there superior choices for this stock (we did primarily consider it an income investment, although a little growth potential would be okay). A goodly proportion of our investments are in energy; how do you view this sector and it's outlook?
Thank you for your most terrific service!!!!
brian
5i Research Answer:
EMAX is down 17.7% over one year. The sector has been mixed. Generally, we see the sector as OK, as valuations are very low vs historical ranges. Most companies are in good financial shape and paying dividends and/or doing share buybacks. We think some exposure is warranted but we would be less than the 16% TSX sector allocation. EMAX, as a covered call fund, continues to provide high income. We would be OK keeping it at current levels if overall sector allocation matches an investors' goals.