Investment Q&A

Q: Can you point me to some decent Canadian commodity stocks. I had TCK and POT awhile back but dumped them when they started to tumble.

Q: People keep saying that since the market has been going up so fast, it was time for a breather. However, the CDN market has not gone up much at all and yet it is getting hammered right along with the US market as if we also had been "frothy". Are there better values in parts of the Canadian market now, as compared to the US?

Q: The dividend stocks are getting hit hard including all the large cap blue chips. I think it's just a normal correction since they've had good run ups for a long time. Is the income dividend scenario over.

Q: Hello to all ...my question regards the Bernanke announcement of pull back on bond buying by the fed. Is this the precursor to stopping ALL QE in 2013 and then raising interest rates at some time in 2014? And are hyou people still confident interest rates will stay low till late 2014 ?

Q: Hi, i'am wondering if 5i research team would have a quick formula to get a fair value of a company vs stock price, when you look at a company financials. I've read books on buffett got a few tricks. thanks.

Q: I'm not sure if there is an answer which can be given so I apologize in advance if that is true. The markets don't appear to like Bernanke's statements going by market action from 2 PM on and tonight's futures. My question is what should we be watching for in the near future to determine whether this is knee-jerk or the start of a serious reaction.

I know the obvious--whether the market goes up or down but is there anything else to watch such as extent, duration of any down, volume or some other internals. Are previous support levels still relevant in any panic?

Bryon in Elmira.

Q: The view expressed on BNN tonight is that dividend stocks are going to take a big hit because of the changing interest rate environment. I am concerned because I am very much a dividends first investor. Could you comment, and, by the way, keep up the good work. David

Q: Peter,

My question in regarding how ETFs are run. If a ETF provider, wisdomtree, schwab, BMO etc., should go bankrupt/insolvent, what happens to my money in their ETFs? Are these funds held segregated from the firms assets? if so, would it be better to hold companies directly to avoid this?

Q: Good Morning all, I have been working on building a 5i portion of my investments since December when I became a member. Each month I have been adding one or two stocks. Overall, I am deploying roughly 15% of my total investments to stocks covered by 5i. The other 85% of my portfolio is well diversified in a variety of Mutual Funds, ETF's and fixed income GIC's. The stocks I have purchased and the current weighting are as follows:
Carfinco - 4.12%
Parkland - 13.72%
Ag Growth - 6.56%
A&W - 3.6%
Brookfield Energy - 12.38%
Cineplex - 5.94%
CML - 2.99%
H&R Reit - 4.78%
K-Bro - 9.82%
Liquor Stores - 7.5%
Richards Pkging - 5.52%
Black Diamond - 5.97%
Boston Pizza - 5.5%
Goldcorp - 4.03%
Healthlease - 2.67%

I will have cash to invest in early July. My questions are:
1. Should I be picking another stock or buying more of one I already have?
2. If I should buy another name, what would you pick? If I should buy more of a current holding which would you recommend?
3. Should I sell or switch out any of the current names I hold?
Thanks again for your awesome service...best available on-line!!

Q: Good morning Peter and the 5i team, In the preamble to your model portfolio, you state: "Each individual investor needs to decide what exposure they should have to bonds, preferred shares, cash and other investments based on his or her own unique circumstances." My target is 60% stocks (chosen mainly from your recommendations), 20% bonds, 10% preferred shares, and 10% cash. If you had to choose among several ETFs for the bond, preferred share, and cash portion of such a portfolio, what ETFs would you recommend? Thanks for your excellent service and advice.

Q: Hi Team: a general question on rising rates and the "positive impact" on lifecos. How is it that with all of their bond holdings, they can benefit as rates rise? Everyone else gets hit; but they don't? thanks

Q: Hi guys I would like your opinion on which utility stock, I have aqn,fts and npi, I should reduce in order to buy pwf or could you suggest a similar type of company with a prospected of capital gains when interest rates raise.

Q: Hello 5i Research,
When holding US dividend paying stocks there is a 15% with holding tax applied to any dividends held outside an RSP.

If the after tax dividend rate on the US dividend is equal to a Canadian dividend, is there any tax advantage, as the with holding tax has already been paid on the US dividend.
Thanks.

Q: A recent article suggested that stocks newly added to the TSX composite index may see a price bump due to buying by index funds. Have you seen evidence to support this thesis for past additions? The three securities added this time are: Norbord (NBD); Dundee Int'l REIT (DI.UN); Ritchie Bros. Auctioneers (RBA). You've expressed generally positive opinions about these three in the past. What are your views now, either in the context of their being added to the index or simply on their own merits. Thank-you.

Q: TD Waterhouse lists the "Book Value" of Cline Mining (CMK) at $1.14. The company, without shareholder approval, is de-listing the stock on June 21st, 2013 because it cannot meet interest payments on debt. Would you please help us all understand what happened here (I understand there are no coal sales, but Cline's assets appear greater than their liabilities)? Marret Asset Management Inc., who represent the bond holders, has been able to take over the Board in several months, and the Board "voluntarily" has (without shareholder approval) approved a de-listing of the stock. Is the Board not obliged to sell assets to keep shareholders whole before de-listing, destroying all shareholder value? Your insight would be greatly appreciated, and an in depth article on the inner workings of these transactions would be a Godsend.

Q: When looking at buying an individual stock, how much weight should be given to the P/E ratio? I read suggestions to look for stocks in the 10-15 range (like the Canadian banks), yet I also see Strong Buy recommendations for stocks with ratios well above this range e.g., Enbridge. I realize P/E is 'just one metric', but I'd to understand it's level of importance when evaluating a stock for possible purchase. Thanks in advance for your response.

Q: I wonder if you can comment on nickel and copper prices going forward as they apply to Sherritt and First Quantum. The nickel story seems to be a glut from big mine start-ups whereas the copper story seems to be mostly China. How will metal prices affect these companies in the near to mid -term (6-18 months)?

Q: Where would an ordinary investor find information on a company's open-market repurchase of its own shares? Do I understand that there are rules limiting (e.g. daily limits) how many a company can repurchase this way? What about open-market purchases by insiders / senior management?

Thanks for helping educate new investors!

Q: Hello 5i Team. After 3 years as a DIY investor who's sought out numerous sources for information and advice, I have to say that the couple of months I've been a 5i subscriber has so far provided the best service and value. The individual company reports are concise and clear, and the Q& A is invaluable.

My wife and I are retired with some pension and a fair number of laddered GICs, but need additional dividend income to round out our retirement needs. We presently have a portfolio of about 18 stocks, mostly dividend payers and reasonably diversified (e.g. AFN, EIF, WFT, BTE, PPL, PZA). However, we've been sitting on a fair bit of cash, patiently waiting for a suitable pullback and entry point on some expensive 'blue chip' dividend stocks in the banking, utilities, telecom and pipeline sectors.

While I know that no one can time the market, what information should a retail investor look for before buying into these sectors ... especially given the current sector rotation?

Thanks
Tom

Q: Hi Peter,
Please explain briefly how the market works "after hours". The exchanges in North America close at 4 eastern time yet sometimes I hear of further trades. How is this possible?
Thank you