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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: This may be of interest to some members:
https://www.bloomberg.com/news/articles/2019-02-14/energy-companies-perform-better-when-ceo-pay-isn-t-tied-to-production
Read Answer Asked by Ronald on February 19, 2019
Q: I am not an accountant or financial guru but I have learnt a few things. One thing I thought I learnt was to value resource companies, particularly oil companies, on a cash flow per share basis instead of an income per share (P & E). I assumed that is due to the fact the product that is being produce is non-renewable. I am I right on this point? If so, then why do people who are supposedly financial gurus who appear on BNN continue to evaluate a resource company on a P/E basis. This happened last night with Ross Healy. Healy has been in the business for decades so he should know that P/E are not a good way to evaluate resource companies, yet that was the metric he used. He is not the only guest on BNN that has done this. On the other side are the Eric Nuttall types who appear on BNN and spew out cash flow numbers that sound amazing but when you dig a little deeper his numbers don't take into account sustaining capital that is required to offset declining production. Who cares if a oil company has $300 million of cash flow when they need to spend $300 million to offset declines. I use the word free cash flow meaning any cash that is left over after enough money is spent to keep production steady. Is this the right term? I know that guests' opinions on BNN should be taken with a large grain of salt but do you think these guests are trying to sway the viewers opinion to move a share price. Apparently foreigners ae not interested in Canadian resource stocks and most of the big Canadian money managers don't seem too keen on them either. So who is left to buy Canadian resource stocks? Us little retail investors. Can a comment on BNN's market call actually move the needle on smaller companies by influencing us little retail investors, in your opinion?(I guess there are three questions here.)
Read Answer Asked by Paul on February 14, 2019
Q: I have a capital loss that I want to crystallize in VET, and I was considering buying PPL to maintain sector exposure. I still believe that VET is a company that I would like to hold long term, but I have some capital gains in 2018 towards which I can use this loss to reduce my taxes in my 2019 return.

My concern is that VET could potentially have large gains in the thirty days that I would need to wait in order to crystallize my loss before repurchasing it. My secondary concern is that since VET is paying a substantial dividend (approx. 8.7%), that I might be better off just collecting my dividend and standing pat.

Please let me know what your thoughts would be regarding this idea. Thanks so much!
Read Answer Asked by Domenic on February 12, 2019
Q: I have held TOU for some time and am disappointed in the performance to date (and of late) and am in a tax loss position. Do you think it's time to sell and look for better opportunities? Do you think it's "necessary" to hold any energy stocks at all in an otherwise diversified portfolio?

Thank you,

Doug
Read Answer Asked by Doug on February 12, 2019
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