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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, Badger Daylightinh was added to Balanced Portfolio recently, as it dropped from its high after last quarter's soft results, which you characterized as " one time". Induatrial alliance today downgraded the energy services sector as well as diversified energy companies, expecting more misses in coming quarter. BAD's was a Hold and its price target was dropped to $43 from $46. Lower rigs utilization south of the border was cited as one of the reasons.
My question is that BAD appears to be lumped with energy services sector, for its valuation and growth prospects, although most of its clients are in utilities sector. If this continues to be the case, how do you see BAD separating itself from energy services pack and receiving a more appropriate multiple. Do you expect this to be an ongoing overhang and if so, does it deserve a place in Balanced Portfolio ? It was added to the portfolio at $39.90 ( I think). Is it prudent to just take a smal loss and move on? Thanks
Read Answer Asked by rajeev on October 21, 2019
Q: Any news if they will trade on the canadian exchange. I am interested in holding this gambling/sports book stock as I think government fiscal pressures will generally be a boon for the industry. I am not interested in holding an british company and their foreign tax implications. Any suggestions when to sell and where I should be able to have this same play on the toronto exchange if they don't cross list. I am grateful for your informative service.
ps can you re check that you have my proper email address. I see you answered my previous question but did not email to advised as you used to.
Read Answer Asked by Mike on October 21, 2019
Q: Hi, In a Q&A in The Globe and Mail, Friday, John Heinzel explained that BYD.un units conversion to common shares will result in taxable gain (if held in non-regd accounts) as if units are sold at market price by the holders, on the conversion date. Is it true? Thanks to 5i, most of us have owned this remarkable company for years and enjoyed huge price appreciation. Is there any way or means, in your view, to avert or minimize this large capital gains event ? Thanks
Read Answer Asked by rajeev on October 20, 2019
Q: I am very pleased with the Portfolio Analytics, and have found it to be a quite useful tool. Thank you for building this product.

Broadly, I would like to better understand how you developed your recommended sector/geographic allocations in the Asset Allocator. In particular, I would like to understand:

1) Certain assets (e.g. gold, REITs) are missing or very low percentages. What is the basis for this recommendation in the Portfolio Analytics?

2) Most if not all broadly based core index funds have a greater allocation to financials than the 15% recommended in the Portfolio Analyzer. Why are you recommending a 15% allocation?

3) Are your recommended asset allocation percentages static, or are you planning on adjusting these percentages over time as markets change?

4) Given that markets typically revert to the mean, how do your recommended allocations compare to the mean sector percentages of major indexes, for example EAFE or the S&P500?

Any insights you can offer to help me better understand the basis for how these asset allocations were developed would be most helpful. Thank you for this excellent service!
Read Answer Asked by Dale on October 18, 2019
Q: Hi, could you please explain the impact of proposed changes to Executive Compensation plan, announced today. How does, the one time cash payment of $12 mln to the two executives, in buying out comapany's contractual obligation under the currnet cash bonus plan, impact company's upcoming earnings, for Q1 of fiscal 2020? What is the purpose of issuing 1.825 mln stock options at current market price ? Does the new compensation structure incentivise Executives for improved stock performance, over time and thus benefit shareholders ? Do you expect a positive market reaction to the NR ? Stock has recently been drifting lower, even when market/technology shares have done well. Thanks so much for your valued insight.
Read Answer Asked by rajeev on October 16, 2019
Q: There was a recent reverse head and shoulder pattern along with two days of higher share volume than the ten day average. I will be adding shares if the share price climbs above $34.50. Also, I will be adding to my share count ( that was a full position before the recent pull back) and will be for a long term hold.
Your thoughts.
Clayton
Read Answer Asked by Clayton on October 15, 2019
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