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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hello,

Thank you for your very prompt response to my question concerning how this ETF is able to pay such a high distribution. I now however have a few follow-on questions.

Since you indicated that a vast percentage of the distribution the ETF paid in the past year was simply a return of investors capital, wouldn't that make the likelihood of the ETF being able to continue payment of the current high yield very suspect over a rather short period of time? If investors are predominantly receiving a return of their own capital back to them, over time, then at a rate of 9% plus per year, won't the fund simply run out of funds to make these payments with over a period of 10 or so years? How would this differ from putting one's money under the mattress and simply withdrawing 10% of it each year?

Does the Evolve Global Healthcare (LIFE) ETF also engage in this practice, in order to support its roughly 6.75% yield?

If ETFs are supporting high yields by returning investor's capital to them and if that practice is inherently unsustainable, then I imagine that including information of that nature in the answer to any and all inquiries about such ETFs, would be very beneficial to all your members.

Thank you
Read Answer Asked by Richard on July 30, 2020
Q: So at what point to you throw in the towel? You have done that to numerous stocks and said the money could be put to better use. This stock has been a waste of money, why would anybody want a health care stock that has this record. Do you really think that one day this company is going to make a deal that is going to make it explode and make up for the waste of time that you have been promoting it.
Sorry but i had to get this off my back.
Read Answer Asked by eugene on July 29, 2020
Q: This is an observation on Knight after your response to Cheryl's inquiry and your revised position stating you are getting edgy about this company.
One aspect of investing I have learned from my time with 5i is to have patience with a company and to not react to one quarter results.
Regarding Knight, we waited and waited and finally they did a solid acquisition which closed at the end of November 2019. 5i indicated it was a good deal for Knight.
They have not completed the deal as they are still pursuing the 48% from BTO shareholders. This is an unusual way to buy a company and it taking a long time.
However, after they pay everything, they will have no debt, lots and lots of cash and have repurchased over 12M Knight shares. They are presently doing a second NCIB with the intent of buying another 10,8M shares. So, they are buying 20% of the floating shares, enhancing shareholder value. Should they have started a dividend instead? I think that was too early and approve of their share repurchase. However, does that mean they don't see any future deals on the near term horizon? I do not know but they will still have a few hundred million...
They have now reported one quarter. The sales met one analyst's estimate but fell short with the other two. Not exactly a disaster considering it is a new company in new and faraway countries during a pandemic. The company says the virus is a non-factor but many in South America, and everywhere, are more reluctant than usual to seek medical treatment that is not absolutely necessary because we want to stay home and that has to hurt drug sales.
I think this company's share price will be double by this time next year and will be approaching $25 - $30 by the end of 2023. Considering the high valuations in the market today, this seems like a prudent investment. If they have not performed by December 2023, I will sell my large position and take the bath. However, I am not buying any soap today.
Do you have any update on whether they have purchased any shares on the second repurchase? And, they were late reporting the last quarter so when do they report again?
It is almost unthinkable to differ from your opinion on any stock because you are all so smart. We'll just have to see on this one but I think it's too early to expect so much after waiting so long...
Thank you.
Read Answer Asked by Steven on July 29, 2020
Q: In the aging demographics trade, which of the three companies would you buy right now and which would you sell?

What are the valuation and growth projections for PLC and SIS?
Read Answer Asked by Max on July 27, 2020
Q: Hi,

I'm wondering if you might be able to provide me with some insight as to how you believe the Harvest Healthcare Leaders ETF appears to be able to sustain a yield of over 9%, when the vast majority of the investments it holds don't pay a dividend of anything close to that level of return and in fact in some cases pay no dividend at all?

I understand that they write covered calls on up to 33% of the portfolio but the difference between the return being paid by this ETF and the investments it holds seems too vast for those premiums to be able to make up all the difference. Am I perhaps mistaken in that belief or might this ETF being sustaining its current payout on "borrowed time"? I cannot afford any more investments like CPG or VET or any other examples of times I've reached for yield only to end up losing a massive percentage of my very hard earned money.

Thank you!
Read Answer Asked by Richard on July 27, 2020
Q: I don't currently have any exposure to health care/pharma companies and would like to start building a position in 2 or 3 companies. Can you please provide me with some names that you would recommend in this area, and the reasons why you think they are good investments.

thanks
Paula
Read Answer Asked by Paula on July 23, 2020
Q: Hello,
I couldn't find any questions on this ETF. PTH Invesco Healthcare ETF
Could I have your pros and cons list please?
Dave
Read Answer Asked by Dave on July 22, 2020
Q: This pharma. comp. recently had studies, showing positive results when linking a base drug to its hydrogen sulfide releasing molecule . so that the drug would be easier on the body when taken. Yet the stock went down from its high of $0.80 ( plus ) to the now price $ 0.42. Appreciate any comments you may have on this company and what the future might hold for the technique they are developing . Thanks
Read Answer Asked by Frank on July 21, 2020
Q: I am looking at US Healthcare (with the exception of WELL), how would you rank these companies in when considering balance sheet, management, growth potential, and MOAT?

Thanks,

Andrew
Read Answer Asked by Andrew on July 20, 2020
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