Investment Q&A

Q: Hello
I recently sold ZWB at $17.85 and now planning to buy CEW (equal weight banks and insurance companies ETF) Is this ok or would you suggest a better alternative.

Thanks

Q: CF has fallen over 20% from it's one year high and shows continued weakness. What are your thoughts on the company going forward?

Q: LTS.us appears to be defying the mkt, and is steadily moving up. What is your assessment? And should I wait to buy? As a financial service company, though small in size, it may have found a niche that will propel it forward.

Q: This is a follow up question on Blackstone. Is it true that some private equity clients are trying to do deals themselves, reducing the need for services provided by companies like BX. Thank you.

Q: Can I please have your opinion on Black Stone BX on NYSE. Is it a buy, hold or sell. Thank you.

Q: Hi 5i team. There was a time,if bank dividend yields (Canadian banks) are over 55% of the 10yrs, government bond yields, they are considered a reasonable buy. At 80% of 10 yrs, a strong buy. It would be screaming now but, of course, we know that the whole yield curve is manipulated. What if things "normalize"? Again, it used to be that long term government bonds were generally around 3.5% (+/- 0.5% say) above the expected rate of inflation. Based on this, if inflation hits 2.5% as we normalize (afterall that is what the central banks want it at). Long bonds should be around 6.0% (+/- 0.5%). Assuming not too crazy a yield curve, 10 yrs bond should be about 3.75% to 4.25%. That means our banks are still goodish buys (based on the 55% assessment). That also means that if inflation moves up to 3% gradually, bank shares, given a stead earnings picture, should be able to sustain their value. Is any of this reasoning valid any more or is it really different this time? Thank as always. Henry

Q: My US exposure is underweight. I am looking at Barclays (BCS), Lloyds (LYB), National Bank of Greece (NBG) as 3-5 year holds with the wishful thinking that they may return to their previous and glorious highs of 2007. Am I dreaming?
Alternatively, can you suggest any US regional banks for a similar timeframe and which large cap US bank, if any, is your favourite?
Thanks.
Steven

Q: Hi Team

In looking at employment data, housing starts and a number of other indicators, it appears the US economy is moving forward in a positive direction.

I am thinking US Banking has to be in a positive light moving forward over the next 3 - 5 years.

Presently I hold Wells Fargo and have done quite well. I am looking at adding a second bank and was wondering if you would comment on USB vs Citibank & BAC (Bank of America)

I realized I am asking allot and am hoping you know how much I appreciate the help.

Thanks for all you do

Gord

Q: What do you guys think of Power Corporation? Have you heard anything about a potential breakup of the company/do you think that would be a positive thing? Is it a buy sell or hold at these levels?
Thank you.

Q: Hi 5i: Just a comment related to recent questions about the relative merits of various Canadian banks. I have often heard the view expressed that 'the banks all run together,' implying that it doesn’t matter too much which one an investor selects to own. I have also heard suggested the strategy of ‘buying the laggard,’ on the theory that in time it will catch up to the group and thus provide a better return over that timeframe. Recently I took the time to put the big five Cdn banks on the same chart to compare their stock performance over a variety of time periods. I was a bit surprised by the results. Instead of converging over the longer time periods, their performance actually diverges significantly, though all provided fairly decent positive returns. The specific results (as of a couple of weeks ago) included the following:
1. Best over the past 3 months: BMO

2. Best over the past 6 months: BMO

3. Best over the past 1 year: CM

4. Best over the past 3 years: RY

5. Best over the past 5 years: TD

6. Best over the past 10 years: RY

The difference over the 10 year period was quite significant. RY’s price appreciation was the leader at over 160%, followed pretty closely by TD at about 150%. BNS was in the middle of the pack at almost 100% and BMO and CM were both under 60% appreciation. Adding the dividends into the mix might close the gap slightly from a total return perspective but the laggards would still be well behind the leaders over the 10 year time frame. (All presuming the charting function I was using was getting correct data and working properly.) Cheers!

Q: I have positions in all the major Cdn banks and I wonder why you, and many other advisers, tout TD and BNS over the other banks. When I started with BMO Invest in June '13, BNS was $59.04 a share and BMO was $61.37 Yesterday BNS was $72.94, a nice $13.90 increase, but BMO was $85.42, up $24.05! Why does BMO never get the recognition it deserves?
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Q: Peter et al,
I watched BNN last night and the visiting guru was John O'Connell.
He did not seem to like Gluskin-Sheff very much, but I did not follow his reasoning. I wonder if you could comment on that? My wife also commented that he seems anti-Canadian. Thx in advance.
Gary

Q: I am looking for a financial stock to augment BNS, AD, TCN and a mix contained within 3 dividend-distribution mutual funds(RBC Cdn Equity Income, Sentry Cdn Income, Sentry REIT).

I am a retired, income-oriented investor who likes to hold for the long term and get regular dividend increases and some capital gains. I also hold ZLB, AQN, ALA, BCE, WEQ, BTE, CPG, SGY, along with an insured annuity and I receive a pension.

Within the banks, I have narrowed it down to RY or TD. Excluding the banks, I am considering SLF, MFC and PWF. I know you recommend SLF, yet the bulk of the analysts lean towards MFC, even though they cut their dividend in the latest crisis. The insurers seem to have more total return upside than the banks.

Question #1: Given my current portfolio mix, which financial stock would you recommend? Is there another stock for me to consider that I have not mentioned?

Question # 2: While I am not a market timer, would I be better to keep my cash on the sidelines for a few more weeks for a better entry point. I know I can always start with partial positions.

Thanks for your help,
Steve

Q: reguarding mic-t why such a drop in share price in the last few weeks trouble with parent co or what

Q: Greetings Team 5i,
With it looking like an increase in interest rates coming soon, and understanding that insurance companies appreciate higher interest rates, I would like to add to my holdings in that sector. I realize you like Sun Life SLF and I'm thinking of taking a position but I'm also interested in Fairfax Financial FFH. I would appreciate your opinion of FFH and the wisdom of taking a position in it at this time.
As always, thanks for your guidance.

Q: I'm looking to initiate a position with market leverage. Would you choose between GMP and AHF? Thanks!

Q: Kudos Peter and Team !

Besides SLF, could you give some ideas for companies that will benefit in a rising rate environment. Does this include the Banks ?

Thank you.

Q: Looking at dc.a , is it a good buy at this price

Q: Hello 5i team,
Financials represent only 8.2% of my RRIF portfolio; they comprise BNS, EFN, HCG and TD. To gain some exposure to lifecos, I think of adding SLF.
Your thoughts?
Thanks,
Tony

Q: are you still recommending element financial, EFN? does it have a dividend?