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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 just saw an article probably announced by the Feds in the latest budget that there will be new legislation on "Bail-In" for banks. I don't know too much about the details, but from my understanding the current framework is that the gov't will step in if the economy is bad enough to help support the banks from collapsing or failing.

The latest change will make it that the creditors of the banks will be on the hook and will have an option to swap their bonds to equity?
Is that correct and what is your take on how this will affect the risk of Canadian Banks?
Read Answer Asked by Eugene on March 28, 2016
Q: I am a retired, conservative, dividend-income investor with a pension, CPP and diversified portfolio of mostly dividend payers (AD, AQN, ALA, BCE, BNS, CPG, CGX, PBH, RY, WSP, WEF, WCP, ZLB, XIT, Sentry Cdn Income Fund, Sentry REIT, RBC Cdn Income Fund, Annuities, Fisgard Capital).

I have held PBH for quite a while and need to trim it (for the 8th time), yet again. I am looking to build a position in another consumer stock (already hold CGX, PBH and those within ZLB and the above funds).

I think ECI would make a good fit, but I am concerned about the high P/E at 27.8 and high P/BV at 3.51. Also, this recent purchase is USA-based.

I am looking for a reliable dividend payer, with some dividend growth and capital gains growth as well. Your comments are appreciated. Thanks...Steve
Read Answer Asked by Stephen on March 28, 2016
Q: This seems like a great business - management seems has done a great job of improving customer retention rates and growing the business but they are about to close on a large and transformative acquisition. They trade at about 9x EV/EBITDA and they appear to be paying about 15x for the acquisition but claim it to be accretive. I've gone through their numbers and have trouble seeing how it gets to be accretive. Your latest report is from August 2015 - have you been looking at this acquisition and do you plan to do a report in the near future?
Read Answer Asked by Robin on March 28, 2016
Q: looking more carefully the insider trading was 1.5 million dollars, like isn't that a real small amount.
secondly i have been in the markets for 40 years and when amaya took over rational there was so much action in the stock befor the transaction it was unbelievable, obviously i have no proof but i was convinced at the time there was insider trading.
it seems to me this was baazov but evidence and proving it is a whole other scenario. please comment dave
Read Answer Asked by david on March 28, 2016
Q: Hi Peter, Ryan and Team - Although we can't ignore all the controversy surrounding Amaya since it has a major effect on the stock, based on just the fundamentals, balance sheet, earnings and potential earnings would this be a good company to buy now. Also what is the debt level - is it a concern - and could you provide the level of insider ownership as well. I have found your your advice to be invaluable ever since joining 5i Research - what a great service! Thank you.
Read Answer Asked by Rob on March 28, 2016
Q: Hi,

I understand from your, rating and description of UW.UN, that you consider it to be a good investment for income investors due to its high and sustainable yield, and as well as the possibility of small distribution increases in the future.

Can you please clarify your position on AW.UN for long-term investors who are looking for a combination of both capital gains and distributions (In a registered account, so ta is not a consideration).

What is your estimate of the increase in share price of AW.UN over a few years? Is it something along the lines of 4% to 5% yearly?

Thanks,
IF
Read Answer Asked by ishay on March 28, 2016
Q: It seems to me the charges against Amaya's Baazov are more akin to tipping and stock manipulation than insider trading, probably even more difficult to prove. However there's a cease trading order on these insiders so wouldn't that affect Baazov's ability to continue with his $21 bid, even if he wanted to? Also how many months might this case drag on before people get their day in court and isn't it likely the stock will mostly mark time till things are resolved?

I wouldn't be in this stock except for 5i but my average cost is <$8 having been in since 2013 and I have taken profits 4 times up to $35 so even though I didn't act on the Feb.29 blog post (actually sold some more @$19) I did act on the CUS reco and am currently +5%, so thanks for that. It's my opinion that we are all personally responsible for our own actions, not someone else! J.
Read Answer Asked by Jeff on March 24, 2016
Q: I have done well with RDM..the company which provides the technology to scan cheques by phone..It now seems selfie payment is the big trend and whichever company provided this technology is going to do very well..Can you recommend a company to take advantage of this? Although I have my doubts if my payment will be accepted on a bad hairday :)
Read Answer Asked by Shyam on March 24, 2016
Q: Based on your recommendation a few weeks ago I purchased SPB, AYA and CUS.
AYA is now down 26%, SPB up 2% and CUS up .8%. Should we still hold these stocks or sell them? Will you be advising your members when to sell these stocks.
Thanks
Read Answer Asked by Terry on March 24, 2016
Q: MY earlier question today concerning GSY was perhaps not clearly stated. My concern based on your previous & positive commentary was whether the very illiquid daily trading was a warning sign. In other words notwithstanding it's last financial statements, are there any new adverse or negative happenings within this company that you are aware of? Thank you.
Read Answer Asked by Robert on March 23, 2016
Q: i think you guys have a lot of egg on your face concerning amaya,on feb. 29 you published a report, 2 stocks that the market might have wrong and amaya was one of them.
a bigger question is who in the right mind would finance bazov to buy the company while these charges are pending- the answer is no one.
the only hope is for him to step aside or a third party bids for the company.
another question, what about your cockroach theory which i believe in, there is never one cockroach, amaya is finished for now.
comments dave
Read Answer Asked by david on March 23, 2016
Q: Hello 5i,
I am looking at the Dutch Auction and was wondering what affect, say a housing downturn, might have on a company like Home Capital. I imagine it would have a lot more riskier loans than the big banks and might be hit a lot harder. As usual, your opinion on this question is greatly appreciated.
Read Answer Asked by joseph on March 23, 2016
Q: Finally thrown the towel in on aya and replaced it with Intertain,good or bad move?
Read Answer Asked by terry on March 23, 2016
Q: does a person average down or simply sell or hold based on the info today
Read Answer Asked by Gary on March 23, 2016
Q: Good morning. A few weeks ago, I took half positions in both AYA and ACQ following your recommendations. Would now be a good time to take either, or both, to full positions? Thank you for your time!

DON
Read Answer Asked by Donald on March 23, 2016
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