Investment Q&A

Q: would you move from Canadian Western to Home Capital?? Thanks Jim

Q: Recently the media was awash with implied heavy concerns around the supposed losses the CDN. banks would be reporting this week and next. They said so while trying to impress an implied authority. The media even went so far as to create a reason.

I had to try and stop laughing once again at the business media in general, so as to be able to type this post, as it once again showed that it basically is a comedy show and of little value to investors. At least when it comes to predictions.

I often wonder if the media have to work and prove their metal at SNL 1st (Saturday Night Live).

So far all of the banks that have reported have provided growing if not all time high revenues, earning, profits....

Stan

Q: I read Element Financials conference call transcript for Q2 and this what I got from it.

They have been winding down 2 portions of their businesses which intern has,
1) Reduced originations and lowered EPS
2) Returned capital to make them M&A ready
3) Short term from "30,000 ft view" makes them look like they are falling apart
4) But, closing these business books will allow them to redeploy the capital to much higher ROE investments to grow earnings faster

The split of the company has put some of it's business activity on hold,
1) M&A has been stopped until the split so no big growth in Q2 and Q3
2) 3 immediate acquisition targets will be pursued when split happens
3) New funds will be launched for income growth and to free up capital for M&A
4) Expect some major accretive acquisition(s) to happen and possible surprise earnings either in Q4 or Q1.

So in conclusion they are setting themselves up for greater growth and shareholder value. To do this they have to sacrifice income in the short term to strengthen their capital, plus delay growth until the split occurs.

Is my simplified summary similar to 5i's consensus on this company?

Thanks, Shane

Q: I've collected a 5% dividend from Genworth for 2 years now. The stock has rallied to 35 recently, which is a nice move relative to HomeCapital (considering it's also in the canadian mortgage insurance business). It is now sitting below a hard level of resistance. I'm considering switching to GoEasy, which yesterday, finally broke above $20/share (was stuck below for a long time). It seems that there is a lot more momentum in GSY right now. Also, Telfser, who's fund performed the best last year, owns it and recommends it. The dividend isn't as good (2.6%) but I'm looking for (some) capital appreciation. Would you be ok with it?

Q: 5i team, can you comment on latest Special Meeting (Tues Sept 20, 2016 9 am EDT), RE: Element Arrangement Resolution; ECN Capital Equity Plans Resolution; and Share Issuance Resolution? thank you

Q: I am in my early 60s. I have 46% of my portfolioin fixed income. All in CBO average cost $19.15. With interest rates in US likely going up a little in Dec. Should I reduce CBO and re-enter TD followig BMO better than expected results.

Q: Unfortunately, my financial advisor recommended this stock back in 2014. I am down substantially and would like your advice (as in selling). Financials are about 15% of portfolio. Agf.b cut its dividends a few months following my purchase. Thanks

Q: What's your current view of Timdercreek. Is it a buy for an rsp account now with it's high yield or do you prefer another one in this space?

Q: Hi, I know that going forward, with the trend in ETF investing, mutual funds might not be a lucrative for fund compagnies like CIX and IGM, but as these compagnies are trending down in prices, at what point do you think they represent good value? I know a lot of people who are still invested in mutual funds and don't have any intention to change. Also, CIX, with the acquisition of First Asset, seem to be adjusting to this new trend. Which one would you recommend and at what entry point? Thanks.

Q: I have a small amount of CIX in an RSP account. I originally bought it a few years ago for the dividend, a bit of growth and the prospect of the company being purchased. I am not terribly unhappy with it as i've collected the nice dividend over the years and the current price is still over what i paid. But now with the industry moving away from high fee mutual funds it seems as CIX is dead money at best and the only attractive thing is it's dividend. I'd like to sell CIX and move it to another financial that has a bit more of a growth component to it. Would you consider a cdn bank as a good replacement? Or a US bank? An insurer? I'm not interested in DH corp, HCG, or EFN. Thanks for your advice

Q: Hello Peter, I know this is a low-volume traded company, and that things have seemed rather quiet lately. Do your views remain positive for a longer-term hold? And do you have any information as to the likelihood or timing of CXI obtaining its banking license? Thanks!

Q: Can I have your opinion on this ETF. It has the best 1/3/5yr returns when compared to others in the Canadian Dividend and Income universe. For example it has outperformed CDZ by almost 3% annualized over the past 5 years. What has contributed to this over achievement and is there any reason why it won't continue to do so over the next 5 years?
Thank-you.

Q: DO YOU FEEL THAT THE DISCLOSURE RULES COMING HAVE ALREADY BEEN FACTORED INTO THEIR CURRENT PRICING AND IF NOT WOULD YOU BE COMFORTABLE HOLDING BOTH AT THEIR CURRENT PRICE

Q: What is your considered opinion of this growing financial concern in light of its short history and just released positive numbers$ and trending pattern.
Also can Vogogo VGO be commented on if it fits into the "fin tech" sector and are they similar.
Thank you

Q: Good Morning,

Your opinion on the quarter and your outlook? After it gets its due pummeling after the open today, would you be looking at a new entry point with recovery on the horizon, or would you stay clear for awhile?

Thanks,

Eric

Q: What do you think of METLIFE right now as a dividend paying long term conservative investment? Any recent changes in their prospects or long term concerns?
Thanks

Q: tYour opinion, please, on recent earnings and future growth prospects for IFC. Thanks Jim

Q: Hello Peter and Staff
I know you like this company . What I am trying to understand is their risk versus others like IGM or CI where there seems to be concern over the upcoming disclosure rule changes . Is FSZ not also exposed and if less so why?
Thanks for all you do
Dennis

Q: In your answer to my question yesterday you noted "If the NAV falls below a certain level (found in the prospectus), the payout will be cut and that will likely be a huge hit to returns."

To be more precise the prospectus says:

"No regular monthly dividends will be paid on the Class A Shares in any month as long as any dividends on the Preferred Shares are then in arrears or so long as the Net Asset Value per Unit is equal to or less than $15.00 (calculated as described under Details of the Offering Valuation of Assets ). Additionally, it is currently intended that no special year-end dividends will be paid if after payment of such a dividend the Net Asset Value
per Unit (calculated as described under Details of the Offering Valuation of Assets ) would be less than $25.00."

When I look at the actual dividend history, I see that DFN has consistently paid dividends of $0.10 per share every month since inception -- including 2008 & 2009 when the markets were so unsettled.

I also note that DFN shares have traded below $15 since Jan 2008, reaching a low of %4.66 in 2008 and trading in a range of $10 - $12.50 since July 1, 2009.


My questions are:

1. Does it seem like they like have more flexibility to continue dividends than the prospectus indicates?
2. Given the this history of consistent dividends over a fairly long period, covering the scary 2008 -- 2009, why would you not consider DFN a screaming BUY?

Q: The proverb about our hometown life giant goes …
“ don’t buy Great West Life's funds, just buy their stock "

This WAS a "put-away stock” ( added to through the decade ) .
Now our investment has been seriously eroded due to my non-reaction to Brexit.
Listening to David Baskin’s comments on bonds and lifecos , perhaps I should trim the sector anyways .

Does one sell GWO here , or is the plunge an over-reaction that we should ignore ?

Thanks you