Investment Q&A

Q: Hi There
I'm trying to understand this rate reset, of which I hold a modest amount. Current price and yield is $17.6 and 6.7%. Reset date is March 2015. Reset rate is ~4% (2.7+1.3). New dividend will be ~$1 ie 5.7% yield on current price. Is it simply that this is the new yield value the market has put on this perpetual? If so, why the drop in a potential rising interest rate environment? Perhaps the credit risk has reduced.
Thanks as always.
David

Q: We want to buy a bank today and would be interested in a opinion between TD, CM and BNS. INK research had a report indicating BNS was at the bottom of their list and your team has a high opinion of BNS. Hope you can clarify
thx

Q: Would you say that holding Canadian Financials (Banks and Insurance)is a decent hedge re: increased interest rates.
Thanks

Q: Hello...I owned this company a while back and sold before it fell off a ledge. The stock seems very cheap and I'm considering buying some. Any thoughts for a long-term hold? The prefs seem attractive too. Thanks.

Q: I have been following CXI since your report, with a the intention of opening a half position. It is down a little today and I assume that's a reaction to currency markets and the Ruble. Would you advise holding off until currency markets settle a little or is now as good a time as any?
Also, thanks for the sage advice on TOU, I assume todays rise is in reaction to the Talisman deal?
Mike

Q: This is not a question, but a comment.
Ref: December 15, 2014 (asked by Jim)

Question: I have been looking for an ETF, on the Canadian stock exchanges, that tracks US banks. Can you recommend any and of course, the best one as you see it. (lol)
Thanks for your help!

5i Research Answer:
We woudl suggest the best one (if not the only one) as ZUB, BMO Equal Weight US Banks. It is $199 mm, hedged to the C$, with fees of 0.40%. Three year annual return is 26.7%.

The symbol for US Banks is ZBK, not ZUB. Per the BMO web site, this etf has a distribution yield of only 1.09%, and the fee is 0.35%. Not sure where your performance numbers came from. There are none on the BMO site as this etf only began in Feb. 2014.

Q: I have been looking for an ETF, on the Canadian stock exchanges, that tracks US banks. Can you recommend any and of course, the best one as you see it. (lol)
Thanks for your help!

Q: Just comment.On 12/11 Seeking Alpha analysed BNS,CM & TD on the following :-1)Forward P/E 2)Dividend Yield 3)P.O.ratio 4)Dividend Growth rate-a) 5yr & b)1yr 5)Dividend yield-5yr average.6) EPS BNS---1)11.09 2)4.13% 3)45.83% 4a)5.53%& b)6.45% 5)4.10% 6)$5.03 CM---1)10.45 2)4.15% 3)43.40% 4a)2.53% & b)7.3% 5)4.6% 6)$8.29 TD---1)11.27 2)3.61% 3)40.64% 4a)8.68% &b)9.3% 5)3.6% 6)$4.04 Conclusion,BNS or CM for higher yield,lower growth.TD for lower yield,higher growth rate,slightly higher P/E,lower yield. Strongest banks in the world in 2013--BNS rated 7,CM #3 & TD #8 The big 6 canadian Banks been hit over the last 2 weeks. Peter,your expert opinion please.Thanks a lot for your usual great view & services

Q: Hi Peter,

Many analysts are recommending diversifying by moving money from bank stocks to Life Insurance companies such as Sun Life or Manulife. But then someone on BNN mentioned that long term bond yields would drag down Insurance companies as well. Can you clarify? If interest rates are going higher, thats great but how can we monitor and take actions based on bond yields?

Thanks,
Neeraj

Q: My portfolio is lacking in life insurers (heavily weighted in energy, tech, mining). How does Manulife compare to Sunlife and Great West Life as an initial exposure to life insurance companies in Canada? It was beaten down so severely over comparatively speaking during the last financial crisis. I wonder if there's more upside with Manulife than the other 2.

Q: I note that in your Sept 11 review of easyhome you state that easyhome sold off 15 US corporate stores due to profitability and unfavourable economic conditions. Give the recovery to date in the U.S. economy and the weak Canadian dollar, have economic conditions changed sufficiently to cause EH to refocus at all on the U.S. market. Is Eh a buy at $19

Q: What should I do if I hold HCG. Where is the bottom? Thank you

Q: Hi Peter,

We own three bank stocks, RY, BNS & TD and are wondering about purchasing some Sunlife. What entry point would you pick to get started in Sunlife. The stock doesn't seem to want to come down like it did in the October correction. We are long term holders of the banks and would also be long term holders of sunlife.

Thanks, Charlie

Q: My portfolio is 37% in HCG due to rising prices since I bought it in 2001 and I have never sold any. I have been meaning to trim it, but I am reluctant to trim when it is falling in price so quickly. I would apreciate your advice. And I really appreciate your service.

Thanks,
Hans

Q: Hi Peter and Team
Today there is some movement in this stock. I see no news as to why. I quickly checked TMX and it seems to be between only a few sellers/buyers. Any insight on this move. Also do recommend adding to a position (slowly) at this point. My weightings in this sector and stock are balanced at present.
Thanks
you Guys are Great!

Q: please give me an update on your thoughts for industrial alliance... the stock seems to be quite volatile on a daily basis!!
ed

Q: Hello Peter & Co.
Financials represent 7.6% of my portfolio; it comprises BNS, EFN, HCG and TD. I have room for one more holding and hesitate between SLF and ZUB.
Your input is always most appreciated
Tony

Q: HCG is down more than 13% the last 5 days. The current price is well below the 200 day moving average. Over the last 5 days it is my biggest loser. Can you provide any insight for the decline and would you suggest adding to my position at these levels. Thank you

Q: I note that AHF have $7.1B in AUM while Gluskin Sheff have $8.1B (only $1B more) but GS trades at ~$28 while AHF is only ~$0.88. It seems to me that some wealth management firm could pick up an easy $7B in AUM for a cheap price buy buying AHF.
(1) Why the discrepancy ?
(2)Is there a metric such as AUM per share that applies to Wealth Management companies to determine their value?

Q: Do you reckon that AGF.B actions will help its share price in the long-term i.e.dividend cut from $0.27 to $0.08 for 2015 plus the Company intends to file to renew its share buyback program when the current program expires in February 2015.
I have been holding it for its dividend but now I am wondering whether I should bail out.
Price even lower today, after dividend cut announcement.