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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, my question is about an article I read in CMS. Bill Gross says investors need to watch only one number in 2017 to figure out what returns are going to look like across the various markets, and that’s whether the 10-year Treasury yield crosses the 2.6% mark. As of today the 10-year yield is 2.48%. "If 2.6% is broken on the upside...a secular bear bond market has begun," Gross said. "Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important than dollar/euro parity at 1.00. It is the key to interest rate levels and perhaps stock prices in 2017."
So my questions are, what will happen if it crosses the 2.6% mark? Does this mean that the yield on bond ETFs such as XBB and VSB will increase? Does this mean that this will be good for the stoch market in general? What is a secular bear bond market?Regards, Gervais
Read Answer Asked by Gervais on March 07, 2017
Q: Could you compare Loblaw and Metro? Loblaw is in the 5i Income portfolio, but I am somewhat more inclined toward MRU. I like the ongoing contribution to MRU's bottom line from its ATD.B shares and due to current share price weakness, MRU looks to at an attractive entry point. As always, I would appreciate your perspective.
Read Answer Asked by David on March 07, 2017
Q: I have subscribed to your 5i Research for a few years and have never learned more throughout my years of investing than I have learned over the few years with you. A question that I should know the answer to is a term used at BNN and by you all the time is a stock is trading at 10 times earnings. Does this mean it takes $10.00 of earnings for the shares to go up a dollar? Thank you. Dennis
Read Answer Asked by Dennis on March 06, 2017
Q: Article "Boomers Stuck in an Unfunded Liability"
Thanks for sharing this insightful piece. Could you please provide your view on this article. Do you generally concur with the premise that demographics and retirees/investors return requirements in a low interest rate environment is essentially creating an underlying put on risk assets that could perpetuate for years/decades to come. Also, could this imply a flatter than normal yield curve going forward as short term Fed rate hikes could be mitigated by pension demand at the long end, benefiting both mid to long term bonds and high yielding stocks. Also, I didn't see the name of the author of the article? Any idea who wrote it? Thank-you
Read Answer Asked by Gary on March 06, 2017
Q: Hi Team,

I would like add a high risk/high reward micro cap stock to my portfolio, and would not be crushed at all if I lose a good chunk of my investment should the stock end up tanking.

All 3 of these stocks have had great runs, but I'm leaning toward rolling the dice on FLY. BUS seems the riskiest to me given the huge influx of orders and lack of a lengthy track record of being in business. FTG seems the least risky, but not sure if its growth rate would be comparable to the other 2 companies.

Which of these 3 do you think has the best growth potential for a long term hold? And what other speculative micro cap high growth names do you like right now?

Also, generally speaking, over a similar time frame (say 5 or 10 years) do you think it is easier for a micro cap company to increase its share price from $0.25 cents a share to $0.50 cents a share, vs. a larger company's ability to increase its share price from $25 to $50 a share?

Final question is what are the key metrics you guys look at when trying to evaluate micro caps that often aren't quite profitable yet?

(I understand if you dock me for a few questions here - its all good!)
Read Answer Asked by Jason on March 06, 2017
Q: I asked this question pasted below but marked it private by mistake. Your propt answer is appreciated and contains valuable onformation. Please share this with the rest of your members and charge me another question for daling with this question again.

Q (Private): H2O Innovation has been trading in the 1.60-1.80 range for about 3 months, what is your opinion of what would drive this company share price higher or is it fully valued here?

Thank you in advance.

This question is private. Only you can view the question & answer.
5i Research Answer:

Looking through the recent numbers we would consider them good. The revenue growth is impressive, and cash flow growth was very good. Earnings were impacted by charges but we would consider cash flow more relevant here. We like the growth in recurring revenue and the backlog. The size difference makes a comparison with PUR difficult, but HEO certainly has some positive qualities, including a strong balance sheet, insider buying and nice growth.

We think the company needs to simply continue what it is doing, grow the top line, sign new contracts and continue to deliver on results. The shares are not cheap given the size of the company, so it is a name that may require a bit of time for the fundamentals to catch up to the valuation.
Read Answer Asked by James on March 03, 2017
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