Investment Q&A

Q: DEAR 5-I:
Thanks for the information on Parex, however, there was a second part to the question. If I dispose of Parex because it is doubtful if the political situation will improve in the near term- what could you suggest for a replacement, CNQ-? already own a full position in Suncor, ARC, Baytex, Tourmaline, and TVE. How about Peyto?

Thanks, Ben

Q: Greetings:
What is your latest analysis of Orezone Gold? J F Tardif thinks it is a multi- bagger, but I think it has a long history of share dilution. What
say you? There hasn't been any questions on this one for a long time.

Thanks, Ben

Q: Hello Team 5i,

You mention the following for Algonquin Power in your Nov. 19 Tax loss screener :
‘We don’t think investors should try to catch the bottom in AQN at any price until the company manages to reduce its debt levels to conservative levels.’

Apparently, the company is trying to sell its renewables to raise money and reduce its debt load. The question becomes, in this post Trump world where renewables have suddenly become a buzz word for undesirable assets, how will the company be able to raise a reasonable amount to achieve its goals? And if it can’t what will ‘any price’ will be for you ?

As always, thanks for your valuable insight.

Adel

Q: I bought this stock about 3 years ago at $2.85 and today it is about $3. I choose to have my dividends reinvested so today have an additional 300 shares but my Adjusted Cost Base has also gone up accordingly. I am ahead very little considering the length of time invested. Do you have any suggestions on income vs growth? Am I better to continue this dividend reinvestment or just sell the stock and move on, or just move to cash dividends? Thank you.

Q: These are running higher finally. Any comments on why they are moving upwards so fast? closing a valuation gap or just its time for small caps to shine?

Q: I think you are going to get a few questions about the offer to buy out Gear Energy (GXE) for the heavy oil assets and leave the remaining assets in the new company called Newco (stupid name IMO). Does the deal seem fair to you? I realize you are not oil experts (since you can't be experts on everything) but I can't figure out if the assets in the Newco are any good. If the Newco assets and good and there will be a $110 million to work with maybe the deal is not that bad. Also, my understanding is the GXE has a lot of accrued losses so who would get the use of those losses? I assume the purchasing company who is getting the gear name would get those losses? If that company is paying taxes then those losses could be very valuable. So valuable that the the purchase price of $110 million is larger paid for from saving on income taxes, right? On the other side I understand that GXE has a lot of asset retirement obligations. Who will be liable for those obligations, Newco or the purchaser? I think these are valid questions that us light share holders should be asking!

Q: I have HPS.A in my portfolio and I see it in the 5i model growth portfolio. At $135, I have made a gain of 40%. I am very concerned about the new Trump administration putting a 10-25% tax on imports from Canada and Mexico. HPS has manufacturing facilities in Canada and Mexico and the majority of their sales is in the US. Tariffs will definitely affect HPS sales and profits. How concerned should I be and should I sell and lock in my gains? I originally intended to keep this stock for a long time.

Q: I read your comments on Canadian telcoms with your suggestion to go to the US to get exposure in this sector (TMUS). But could part of the weakness in Canadian telcos be due to tax loss selling? Or are there too many long time share holders whose adjusted cost basis is so low that even this year's telcom pull back is not enough to trigger a capital loss? Just a thought, s for me I will keep my telus but I am not adding any more.

Q: Please compare risk and reward of RBA and TIH. Going forward, which stock do you think will provide the highest total return. Thank you

Q: Hi 5i.

Which Canadian companies would meet the criteria to be considered dividend aristocrats, if they were listed in the US? I know one of the criteria is that the company must be a member of the S&P 500 Index, so obviously an equivalent index membership will have to be used; perhaps the S&P/TSX? Or, would you apply a minimum market cap threshold? It would be interesting to know what Canadian companies would meet the test. Thanks.

Q: telecoms have had a rough year and have not reacted positively to the lowering of interest rates with the heavy debt levels they have I would have expected a positive reaction by now. That being said if you had to choose between Rogers, Telus or BCE what one would you choose and why ?

Q: Forward metrics for LLY and NVO show roughly the same revenue growth, but LLY shows much better earnings and ROE growth. What, then, is the case for recommending both (other than that the market is big enough for both to appreciate)? I realize that, for drug developers, depth of pipeline and patent expiry are also factors, but for simplicity have assumed that, in these respects, their situations and risks are comparable - in which case, shouldn't things like ROE growth turn out to be decisive?

Q: Can you help me understand todays GEAR- transaction, and as a sharehold, what we get out of the deal. Is there a chance of a better offer coming, or is our choice that 66% vote for the deal, or we stay as the previous company GEAR

Q: I see that financial yield is being used as a evaluation metric on GSY. Can you please explain how this valuation is used as compared to say more traditional measures such as; ROE, EBITDA, etc. Thx Steve

Q: I know that utility and pipeline companies usually have higher than normal debt levels but would any of these cause you concern? A quick comment on each company would be appreciated and whether you would buy, hold or sell. Thank you!

Q: Looking recommendations for a fixed income CAD ETF (not equity) product where the assets are held in USD. Thanks!

Q: I read on Yahoo Finance that POET has voluntarily delisted from the TSX:V. I see I can get a quote on NASDAQ and the Canadian exchange, but the volume on the latter is limited. I prefer to buy it on a Canadian exchange with C$, but am I better off buying on the US exchange given the higher volume?

Q: CALF (81 %) has led IWO (50 %) and IJT (59 %) in 5-yr returns, yet has fallen behind the other 2 in 1-yr returns (about 11 % vs 30+ %). Can you please provide a reason for that and also comment on which might do better in the next few years? Thank you.

Q: I'm planning on purchasing some additional US investments in my RRSP. I already own QQQ, which represents approximately 38% of my US holdings. I was planning on dividing the remaining 62% between SPY and VTI. I'm described as a growth investor with a 5-7 time horizon before possibly beginning withdrawals. May I get your thoughts on this division? Should I consider cutting back on QQQ to redistribute to the other two? The US represents 45% of my overall RRSP holdings.

Q: Team, I have holdings in all three and although I have done great with BDX over the years, it seems to be struggling. I am thinking of selling but would like your comments on increasing my holdings in SYK and ISRG or would you provide insights another option. All three stocks are in my non registered account.
By the way, because of your insights on AMED of a few years ago, I sold the stock and purchased GOOG.............it was a great move
I have whittled down my holdings to 15 stocks and want to be careful adding more