Investment Q&A

Q: Dear 5i Team,

Can you help me understand why Intact trades at such a multiple of book value when compared to other strong P&C / specialty insurers like Allstate which also have a long track record? Is it worth that premium?

Thanks!

Derek

Q: Am wondering if ECN would be a good replacement for GSY for better growth.
Thanks

Q: Hi,
BNS stock price dropped by almost 1.5% today while the other 5 major banks were up. Are you aware of anything that may have led to the decline? Thanks.
Keith

Q: Can I get your thoughts on the Lemonade IPO please, the market seems to eat up all the tech ipo's these days. I couldn't resist myself, but what does 5i think a ballpark fair price would be for something like this?

Q: I sold my business and started investing last year. I am trying to build balanced portfolio and struggling with the bond portion. I don't want to buy individual bonds and was looking into something like HBB for unregistered portfolio and VAB and XSB for registered. Yet, I am very uneasy about buying bond ETFs in the near-zero interest rate environment - the rates can only go up (unless we end-up with negative rates here) and, obviously, bond ETFs will be going in the opposite direction. I was thinking about VSC but almost 35% of it are junk bonds, so no comfort there. With PSA now paying only 0.65%, I am really out of choices for the fixed income portion of my portfolio. Any suggestions (both for CDN and USD positions)? My time horizon is 10 years and I want something safe and tax efficient.

Q: Any cause for concern with the rumoured leaving of the CIO. Thx

Q: I would be very interested in your opinion of companies engaging in the provision of consumer debt. Given the employment, market, and general economic situation would a well-financed company in this space do well? Any thoughts on the relative merits of OMF:US and GSY:CA? Do you have any favourites in this space?
Thanks, in advance, for your invariably thought-provoking reply...

Q: US bank stress test.

I read about the recent stress test results. Apparently results in general are not great.
Apparently Wells Fargo may cut their dividend next quarter and JPM opened the door by saying it was possibility they too could cut in the future. Never heard of such from the Canadian banks.

I have 20% of my total RRSP portfolio in JPM, Bank America, and Bank of New York Mellon.

They big US banks in general performed very well since the financial recession but now I wonder for the future?

Stephane

Q: I have held this trust for 7 years and it has performed nicely for me as I have held it for income only. Lately for the first time it has faltered in unit price and I am wondering how safe the units are and the very nice payout it produces monthly.

Q: I own many POW shares, some as the result of PWF merger. I would like to sell some of the POW, incur the loss and buy something else in the financials stocks. I already have SLF, MFC, FSZ and banks (BNS, TD, CM). And some preferred shares, mostly PWF/POW/ RY in this sector. I am reluctant to replace POW by GWO. Would IAG be a good candidate at the moment? Or take a risk in Us banks thru ZUB for example?.

I might sell FSZ because my expectation for a takeover or merger seems to diminish. Or would you keep it after their recent changes, since I don’t need more losses at the moment.

Thanks a lot.

Q: What is your opinion of MFC as a longer term hold (5 yrs)? I'm looking for safety and a return that is better than today's interest rates. Given its past performance how likely do you think it could be to be top of its class over the medium term?

Q: What can you tell me about Grayscale Bitcoin Trust (BTC)? It has a book value of about $7 and trades for about $11. What fees are associated with that investments? Is it a buy or an avoid?

Q: Are either of FITB, BK, or STI at risk of cutting/cancelling their respective dividends? Also, can you rank the most prominent U.S. financial institutions in terms of the reliability of their dividends?

Q: Considering the large amounts of reserves the Canadian banks have had to put aside and the possible hit they may take in the next quarter,do you think the current stock prices are a good buy or are they overpriced ? Should a person wait for a better time to enter?

Q: Private Equity is an area of investment that has been getting a lot more attention recently. Which listed asset managers specializing in Private Equity are worth looking at? Would the multiple-recent-name-change firm SuRo Cap Corp. be worth inclusion in this group?

Q: Square has had a good run. Time to take profits, or let this winner run?

Q: In today's Barrons on-line edition there is a story that "pressure mounts on US banks to halt dividend payments". Do you see that pressure on Canadian banks? If Canadian Banks do not feel that pressure ( and assuming that is the case even though all the Cdn banks trade on NYSE) this may make Canadian Bank shares more attractive if US banks do trim their dividends

Q: Would like your outlook on MIC and its plans to not change it's underwriting policy.
Thanks
Bob Rose

Q: Could I get your opinion on Mastercard please. Also would you own either it or Visa.
Unless the trend to less cash reverses these companies should have some strong tailwinds but are never inexpensive from a valuation standpoint. Thoughts pls.

Q: If you have to to invest in a Canadian bank now, wich one would be your first choice, thank you