Investment Q&A

Q: hi group i am very light on financials does it make sense to invest in the smaller companies for exposure to the financial sector. (eg GSY,IFC EQB - please rate these 3 (in order of preference and why.-against CAD/US BANKS .. also I am light on Health care do you see the sectors as a buy please give me you top 3 picks in healthcare presently i own CVS and PFE should i sell them to invest in you picks?...Thanks for you help with this

Q: Which would you recommend as a buy right now, and why: MFC or SLF?

Q: Hi Peter, Can you provide me your updated thoughts on Olympia. The growth has been outstanding and it pays a 7% yield. Do you think they can grow the dividend. Also any comments on the management would be appreciated - I haven't heard much about them but they keep delivering.

Thanks

Q: Hello 5i Team

I currently own shares of Canadian Western Bank (CWB) and National Bank (NA) in my TFSA.

The yield on the shares of CWB are approximately 1 % higher than yield on NA

The announced takeover of CWB by NA is at at a share ratio of 0.45 shares NA per 1 share CWB.

NA announced an public offering of NA shares at $112.30 concurrently with the takeover. This implies a price of 0.45 x $112.30 = $50.54 for shares of CWB.

This morning share of NA are trading below the offering price (~$110.40) and the share price of CWB are trading around $42.35 which implies an exchange ratio of 0.39.

Is there an opportunity to acquire shares of CWB at a small discount to the takeover premium (with the risk of the deal not being approved by the government) in the anticipation of the takeover and exchange for shares of NA or should I just let the deal close in 18 months (end of 2025)?

I would receive marginally more dividend income from the share of CWB while waiting for the deal to close.

I also think there will be selling pressure on CWB for the next two weeks as investors may be inclined to sell CWB in anticipation of the June 25 change in capital gains inclusion rates.

Thank you

Q: Hi 5i, for better growth over the next 3-5 years would a switch from to TD to CWB, so as to take advantage of discount, make sense? I'm worried about TD being put in the penalty box for any new US acquisitions.

Thx

Q: Hello

I recently submitted a question on TD, expressing concerns about possible lingering ill effects due to the money laundering episode. In a nutshell, 5Is position was that there was little concern on their part about TDs future and that most banks are subjected to the same money laundering threats. Just received this presser:

"Toronto-Dominion Bank's anti-money laundering program will take longer to cure and could have a greater and more damaging impact on the bank's franchise and earnings power. After confirming TD Bank's AA credit rating in May, additional shortcomings in the program, controls and operational risk-management practices have surfaced. Morningstar expects additional investment in risk and control infrastructure and expected monetary and non-monetary penalties, as well as the ongoing attention of leadership on remediation efforts, will act as earnings headwinds. There also is a risk regulators conducting investigations will reveal other related and/or unrelated issues, it says."

Still little concern on your part?

I did sell a third of my TD holdings after receiving your input. It was my largest holding.

Carl

Q: Are any of the other large Canadian Banks similarly exposed to investigation/prosecution in the U.S. for the same activity that TD was convicted? Also, can to tell me what % of each banks total business revenue comes from U.S. sources?

Q: Would this be a good time to sell TD because of there US problems and buy RY for long term dividends and safety?

Q: JUst getting back to your answer yesterday about why NA dropped $6 on June 11. Not sure I agree with your assessment that it has nothing to do with the announcement of purchase of CWB. If CWB is NOT the culprit than what is please?

Q: Goeasy plans to introduce a credit card soon to their existing customers and appointed Patrick Ens who comes from capital one with experience in the credit card market.

Do you believe it could be a significant growth vector for the company if the execution is done properly ? Thank you for your excellent service.

Q: Hi 5i
EQB up today, is this related to the national bank CWB deal announcement?
If so where does it go from here? Possible takeover target?
Would you continue to be buyers of EQB at this price?


Thx

Q: I own it. Do you believe it will go up from here (now $41.89). I’m wondering if I should sell all, half or none. Thanks

Q: Hi, I’ve always wondered and wanted to ask how and who makes the 68% return at the open today on CWB? It closed yesterday at 24.89 and opened 9:30 this morning at 42.65. Thanks.

Q: How do bank stock prices react to interest rates moving up or down?

Q: CWB up quite a bit today on the news of National's attempt to purchase. Up 70% but if I'm not mistaken there is still 40% on the table. { Please correct me if I am wrong about that 40% } Pundits on the Business channel have been commenting this morning and the consensus seems to be the government is unlikely to quash the deal ..... 40% is a nice arb play if the odds look good. Mind you if it doesn't go through there would likely be a nasty drop ...... What says 5i ? Do you like the arb play here on a risk reward basis ?

Q: As the NA price drops due to its offer to buy CWB is it a buy at this point or better to wait to settle the dust. Also, do you expect issuance of one billion new equity will offer at a lower price than current market price or it may dampen share price further?

Q: Would BMO be a good proxy for TD? Mid and longer term which do you see as more likely to do better? Please explain your reasoning.
Other banks or other high yield suggestions for proxies?
I have lots of BNS.
Thank you.

Q: Hi, sorry if this was answered already. Any comments on the Globe and Mail report that National Bank offered to buy Canadian Western Bank in a deal valued at $5-billion?
Thank you, Michael

Q: Why did the stock go up 27% over the last year?

Q: Could you comment on OZK and their recent drop?

Thank you