Investment Q&A

Q: We just received notice from our broker Questrade. Some securities, notably LPs will be affected by an extra tax on dividends, and a 10% witholding tax on sales of said securities. The list, https://email.questrade.com/NDE1LVRSVS0xMzEAAAGI2aUK0lRlxgseeoLC1Eghn1II_fBto39UgUhfF225XXBg6TyuY3qXPyY6am5dK1dIACvlnN0=
is quite large and include even names like Lazard,LAZ which i believed was a regular trading stock.
Will that affect holdings in RSP accounts? Is there to be a rush to the exits from a number of these? If it affects holdings only in regular investment accounts, would it be a good opportunity to to catch a few discounted names in a registered account?
Sorry for a lengthy and intricate question.
Thank you and Merry Christmas.

Q: Note: Allkem Ltd trades under the ticker AKE. Very few questions, last in 2021. Now established operations and profitable. I know it's out of your geography of reporting but could you do a quick analysis of its fundamentals, new projects nearing completion and, particularly, its recent decline in share price, as it's sharply off it's recent all-time highs

thanks for all you do and all the best for the Festive Season and 2023
John

Q: Hello 5i team,
I currently have XRE for real estate coverage in my TFSA for income. I was thinking of switching over to ZRE since it gives a slightly better payout.

I was wondering if there is any advantage for either of these ETFs? Aside from stock purchase limitations (XRE is capped, ZRE is equal weight), does one hold a better real estate portfolio overall?


Thanks,
Andrew

Q: Hi,

Now that the dust has settled and the BN/BAM spinoff is complete, I have the BN shares in my accounts but wanted to confirm the split and avg. costs showing before and after in my brokerage account and if its correct. Sometimes when they manually update avg. prices for these kind of things, they enter it wrong.

Before spinoff and after spinoff shares and avg. cost:

Account 1: BAM 393 shares @39.09 ------- BN 393 shares @33.11, BAM 98 shares @29.50

Account 2: BAM 601 shares @51.60 ------- BN 601 shares @33.11, BAM 150 shares @29.50

Account 3: BAM.TO 151 shares @44.97 ---- BN.TO 151 shares @45.22, BAM 37 shares @40

Account 4: BAM.TO 150 shares @65.64 -----BN.TO 150 shares@45.22, BAM 37 shares @40


1. For account 3 and 4, if I had 151 shares and 150 shares and divide by 4 to get new BN shares, I get 37.75 and 37.50 shares after. Do brokerages usually round down? I thought I would have gotten 38 shares of BN after the spinoff.

2. When I compare my cost basis before and after, it should be the same correct? Looks like they assigned these prices of $33.11, $29.50, $45.22 and $40 to each of my BN and BAM shares after. Where did they get these from and if incorrect, what should they be after for BN and BAM?

3. When I look at account 2:
Before: BAM 601 x $51.60 = $31,011.
After: BN 601 x 33.11 = $19,899, BAM 150x$29.50= $4,425 (Total = $24,324)
Why did my cost basis go down from $31k to $24k? Something is not correct here.

I would like to contact my brokerage and have them update my avg. cost for BN and BAM but wanted to clarify these few things before I do.

Thank you for your help!

Q: My question in general is how reasonable is the current valuation for BEP.UN ?

I believe the historic high yield is somewhere around 7%, so we're a long way off from that. I think we're close to 4.9% (?)

P/C seems pretty reasonable now relative to the past, but P/BV is still high compared to the 1.1 low.

How about price/FFO ? I can never find this. What is it currently? I think the low was about 4.6 in the past.

Thanks as always for answering the above, and Merry Christmas to your AWESOME team at 5i.

Q: Relating to your answer to my question nswered this morning …..
Could you please explain “reverse split 1:3”
It doesn’t sound like a good thing.

Q: SDIV has gone through some type of split in the last couple of days, as well as lowering its dividend to .08.
No dividend at all was paid into my LIF account.
PDBC seems to be under the radar as far as the dividend payment is concerned. I cannot locate the amount.
Kindly advise what is going on with these and please offer your position on them.
Thank you!

Q: Hi Team,
Since it's near year end, I was wondering if you could list me some of your TOP PICK ideas for a 2023 TFSA contribution. I am looking for long term hold ideas. Thanks

Shane.

Q: Has the spin-off gone well or it went badly? Seems like a significant drop so far..what happened? And what is the future? If I want to capture capital losses whic one should I sell (BAM or BN or both) and which should I buy after one month? Thanks.

Shyam

Q: Hi Guys
I would like some Emerging Markets exposure, After listening to Jeffery Gundlach and Felix Zulauf ( both very smart guys) they agree China is now totally uninvestable.
My problem is i own ZEM for my emerging markets exposure which has about 30% China.
There is EMXC which i could buy instead which excludes China, but holds about 20% exposure to Taiwan.
What would be your strategy?
Thanks Gord

Q: Hi, please provide your thoughts on Canadian grocers as investments at this time of anticipated recession and your top choice with a brief explanation. Thank you!

Q: I see there are stocks with an RSI near 30 and at a 52 week low; BNS, TRP, BEPC, and BCE. Also, WCN is not at a 52 week low but has an RSI at 30. I am very tempted to add to my positions at these levels. How much weight would you place on a stock's RSI and 52 week level?
Many thanks, Dennis.

Q: Hi, I am in the camp that fossil fuel industry will be a place to be in 2023. With that said do you feel it is better to be in a fund such as NNRG or XLE or to be in individual companies either CDN or US? If so, can you give a few with some good dividends that you would recommend to look at. Thanks

Q: I was wondering if you could tell me how much the Canadian markets are being impacted by zero to date trading options. According to an interview I heard on TD , the US Option Exchange is putting out options with daily expiry. Reference was made to this practice before the 2008 market crash.
I would appreciate your thoughts on this topic.

Thank you.

Q: Most of the forestry companies I follow are down 25-50% this year. Resolute is trading near it's 52 week high. Do you know why this is the case? I notice they have pulp, and some private label paper products (but this segment doesn't seem to be helping Cascades).

What is your favourite forestry company these days (for eventual rebound in construction)?

Thanks,

Q: Hi 5i Team,

I am in the process of setting up an investment account for my nephew and would like to stick to indexes for the time being until he is comfortable with individual equities.

Given the current market climate and your best guess, what % would you attribute in a portfolio (out of 100%) to the following indices: VFV, XQQ, XIC, IWO, XGRO. Please feel free to suggest any other index that was not mentioned in the list above.

Thank you!

Q: Can you tell us how much cash per share Fulgent still has, after the acquisition of Fulgent Pharma? This move was obviously not liked by the market. Does its current stock price make it an attractive investment in the medium to long term? Hold, buy or sell?

Q: this is a question about buying us stocks when exchange is high to make sure I understand correctly.

Buy us stock when us exchange is high; example rate of exchange 1.40 means 100 shares @ 10 cost me 1 000 x 1.4 = 1400 $ can
stock price doubles from 10 to 20, means I should have twice as much money BUT if I
Sell when us exchange is low, 1.0 means a 100 shares @ 20 gets me 2000 x 1.0 = 2000 $ can
Price per unit doubled from 10$ to 20$ but actual return to you only went up by 600$ due to exchange rate effect.

so this (presently) would be a poor time to buy us stock due to high exchange rate. CORRECT ?

the corollary to that is: the best time to buy a US stock is when the exchange rate is low or at par with american dollar. CORRECT ??

Since what matters is final amount in my pocket. should I use historical average U.S. exchange rate as a rule of thumb for when exchange is a "good" time to consider american stocks and buy when below ? example historical exchange rate is 1.2 and buy when 1.1

what are historical average U.S. exchange rates over many decades ??

thanks

Ernie

Q: Dear 5i,
If I understand correctly, BEPC-TO and BEP.UN-TO are identical companies.
In a perfect world they should trade at the same price and thus offer the same dividend yield. If this is the case, does it matter which one a person should purchase in their registered accounts like a RRSP? (ie would there be any witholding taxes with either one?)

thanks

Q: Hi 5i,
I’m working through an audit of my technology positions for year end. Would you rate each position as a buy, sell or hold for your own portfolio today?

Thank you!