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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: CSS closed @ $15.25 up .08.Thomson Reuters ranked it a 10(the highest) with a target range of $16.30(high),$15.20(mean) & $14.60(low) by 7 analysts.Note $6 low on Oct 7/11 & up since then.Been telling my friends about the great risk/reward ratio since our P.Hodson's recommendation on 7/29.Will have to wait to see what unfolds soon especially if the price holds or continue to increases
Read Answer Asked by Peter on September 02, 2014
Q: Hi 5i: some additional thoughts on the CSU debentures. Shouldn't people think first about whether these debentures are really the right kind of investment for them? For starters, maturity is a long way out (2041?), so the fact that you can buy 100 face value for 95 with your CSU rights is not as material as what the debentures will trade for in the meantime. Second, long term corporates may not be a good idea from a risk standpoint. Hank Cunningham I believe suggests that average fixed income investors keep their corporate maturities at 10 years or less, just because the corporate world does not provide sufficient visibility to justify going longer. Let's remember too; this is no utility; this is a tech company with a significant growth by acquisition component, despite successes to date. Third, if these really are the product for you, shouldn't you be thinking about whether you would use market purchases to top up to your regular position size, essentially with the rights just giving you a small potential discount on the whole position? Along those lines Peter, would you consider making CSU debentures an important addition to the Model Income Portfolio and, if so, take us through the analysis of whether to go ahead with the purchase at anticipated prices and what you would sell to do so? Thanks!
Read Answer Asked by Lance on September 01, 2014
Q: As for Kathy's question on acquiring a small CSU debenture with rights, possibly she ought to check with her broker to see IF a $200 bond could be sold. This quote is from the itrade site "Face value should be in multiples of $1,000.00 as there are no fractional bond units, except for strips where the rule in multiples of $1,000 does not apply." Also it is not possible with them to trade anything less than a $5000 corporate bond online.

Perhaps for most of us small holders of the rights the best course of action is to sell them on the open market; otherwise you might be stuck with an unmarketable security until maturity in 2040. Alternatively if you're really keen on the debentures you could purchase enough rights to get up to the minimum trading levels so you are holding something marketable. Thanks, J.
Read Answer Asked by Jeff on August 30, 2014
Q: As a Constellation shareholder, rights have been deposited into my account and I have been considering an additional purchase of rights (CSU.RT)on the open market to participate more fully in the debenture offering. However, I have no experience in such rights offering and no idea as to how to value them. From the price action in the first week of trading ( ranging from .40 to .70 cents), I suspect I'm not alone. Any advice, suggestions, guidelines appreciated.
Thanks
Read Answer Asked by William on August 29, 2014
Q: I have set aside funds specifically for the purpose of establishing an income portfolio. While I understand your reservations in trying to time the market, could you recommend a strategy for deploying the funds giving consideration to the weak seasonal period for equities we are entering, the imminent elimination of QE, and the potential for incremental increases in interest rates starting within the next six months. Would it be wise to place the funds in money market, or even a short term bond etf like VSB or VSC, and wait till later in the year to begin the investing process? What ideas in the 5i income portfolio are buy-able currently? Many thanks.
Read Answer Asked by Rupert on August 28, 2014
Q: Hi 5i team, The recent run-up in the shares of WIN. Is it a result of: (1) a change in the market's sentiment toward the company and is therefore broadly based or (2) a few big investors including maybe hedge-funds buying for a fast flip or (3) someone buying a stake for a bid or for activist influence? Afterall, the stock was at $8 plus when the company's situation was't that different from now. Thanks as always. Henry
Read Answer Asked by Henry on August 28, 2014
Q: Hi there,
I am fairly young with a high risk tolerance. I have quite a diversified RRSP portfolio with lots of 5i companies and a mix of others. I'm looking to add a new stock and am considering DHX and SJ. I'm looking for your opinion on which will give me a better return. I'm also quite patient so can ride out periods of volatility. DHX has risen quite a bit lately while SJ has been stagnant for some time. Any comments to help me with my decision would be appreciated
Thanks
Read Answer Asked by Bryan on August 28, 2014
Q: Hello 5i team,
This is more a comment than a question on THI.
I bought THI early in 2014 in my RRIF account because of its very high ROE and because I felt there was some modest growth left in Canada and a larger one in the US even though I was also cognizant that the same store sales were in constant decline; so I thought I'd be happy to make 20% pa for the next 2 years.
Enter Burger King with its questionable motivation, with a questionable rationale, backed by very smart people motivated by fast money.
I could no longer recognize the new THI (the risks associated with its future) and decided to take advantage of the very generous offer. I sold all my holdings for a 50% profit in just a few months and will move on; in so doing, I more than met my profit target.
Regards,
Tony
Read Answer Asked by Antoine on August 28, 2014
Q: Hi Peter and Team,

Would really appreciate your comments on the article in today's Globe and Mail re Burger King.

http://www.theglobeandmail.com//globe-investor/investment-ideas/think-carefully-before-biting-into-burger-king/article20227396/

The author is less than positive about this proposed merger.

Thanks in advance.
Read Answer Asked by Jerry on August 28, 2014
Q: I tried to submit something similar to this yesterday but I think it timed out so if this is a duplicate just ignore.

I think I can offer something to Jeremy's question on Questor. I work in oil and gas.

There are 2 reasons operators use incinerators:

1. To replace a flare of unsellable natural gas for public concern or environmental responsibility (hide the flame from view, get more complete combustion). There is no monetary benefit to incineration in this instance - it's an added cost. Reasons for doing are public image, environmental responsibility, and sometimes regulatory.

2. Using natural gas as fuel to burn up an undesired product such as hydrogen sulphide. This is the application where the payback Questor talks about comes in to play through using less fuel.

The North Dakota example would be primarily category 1. This also probably represents the big growth area.

Questor's marketing materials don't differentiate between these applications clearly. They could also probably do more to show how their incinerators are better than other ones and not just flaring.

I agree with Jeremy's point on not seeing a clear catalyst for growth after a number of years of slow growth but am relying on the 5i analysis here that the growth is materializing. Despite being sceptical for that reason, I do hold QST as I believe they are a supplier of choice in the field.

Hope this is helpful to some.
Read Answer Asked by Andrea on August 27, 2014
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