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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 Peter,

Being a relatively long term member, I have greatly benefited from having my portfolio mimic the 5i Balanced portfolio and a selection from the 5i Growth Stocks. I have not yet sold out of WCP and switched to SU. Before I do, I was wondering you thoughts on taking the WCP proceeds and adding to MX instead? I am growing impatient waiting for an Energy turnaround and MX seems to trade like one anyway, but I like the fundamentals more. I already have a full position in ENB. Some commentators on CNBC (i.e. Cramer) is of the opinion that millennial fund manager hate fossil fuels, so oil stocks may be in the doldrums for a long time, or worse broken stocks forever. Of course, this could very well be a bottom when everyone "hates" this group.

As always, thanks for the continued great service!
Angelo
Read Answer Asked by Angelo on February 04, 2020
Q: I am interested in your view on the best strategy for selling stocks to raise cash in a non-registered account. I am looking to sell 1% of my total portfolio, and my thinking is to either A) take this out of one or both of two stocks that are the largest (each about 5%) weighting in my portfolio or B) sell my least favourite, lowest weighting, stocks (energy producers) with 3 stocks comprising 3% total weighting.

With option A) I could pare one of my largest holdings back to 4% or both of them back to 4.5%. One stock is ENB, in which I have a 30% gain and the other stock is AAPL, in which I have a 350% gain. ENB pays a 6% dividend, which I am reluctant to lose, and which benefits from the dividend tax credit. AAPL pays a 1% dividend, which is fully taxable and easier to give up, but I will have to pay a sizeable capital gains tax. I have no stocks with losses that I can sell to offset the gains. You have always advocated hanging onto winners, and both of these stocks are "winners" in a way, one for income and the other for growth.

With option B) I could sell half my energy producer holdings. I bought the energy stocks as a "lottery ticket," expecting at least a double if and when energy prices rebound. I hold CVE (up 25%), ERF (breakeven) and WCP (up 32%). They are roughly equal weight, so I could achieve my goal of selling 1% of my portfolio by selling just one of these three stocks.

Which stock(s) would you recommend I sell and why?
Read Answer Asked by David on January 22, 2020
Q: How do you view the above companies to boost yield, energy weighting and opportunity for capital gain. My objective is to minimize total equity exposure while achieving a targeted yield by seeking out more potent dividend names with good upside potential. Thanks.
Read Answer Asked by Curtis on January 15, 2020
Q: Hi, I currently hold ENB (0.53%), PPL (1.03%), TOU (0.48%), and WCP (0.37%), total of 2.42% of my portfolio. I actually have ENB in my utility sector weighting, which would make my overall energy even lower. Would you consider it 50/50 energy/utility??

I'm looking at slightly increasing my sector weight in energy to maybe 4-5% since its so low (mostly because my current holdings have gone down or I've sold previous energy positions). Energy companies in Canada have been hit so badly its hard to put money back into the sector right now. I know you hold MCR in your portfolio and you like PXT and SU. Based on the current valuations/fundamentals and future potential, should I add to any of my current positions, sell them, or add PXT or SU to the mix?? How would you suggest consolidating these?

Thanks!
Read Answer Asked by Keith on January 13, 2020
Q: Assuming oil (WTI) at $65 - 70 which of the following stock PRICES would possibly gain most. Please order them best gainers first. please insert your choices as well. ARX, BNE, CJ, CNQ, TOU, VET, KEL, FRU ,WCP ,SGY
Would the order change if you consider financial health ?? I f so how ?thanks and a happy healthy new year to the 5i community
Read Answer Asked by JOSEPH on January 08, 2020
Q: Do you consider any of these dividends to be unsustainable? Any other comments on these companies?
Read Answer Asked by James on December 11, 2019
Q: 5i
Oil represents about 5% of my portfolio and is comprised of Freehold, Vermillion, Surge and Whitecap. I cannot get a good feel as to where the price of oil is headed in the next 2 years. Appears to me there are conflicting views. Should I get out of the oil sector, invest in good dividend paying stocks that would be more stable and re enter the oil market or not at a later date. All my oil stocks do pay high dividends, are they sustainable. Appreciate your insight on both the oil market and potential stocks to invest in regardless of sector if you feel exiting the oil market may be the way to go.

W
Read Answer Asked by Wayne on December 09, 2019
Q: A trading education question - today (Dec.5) WCP opened at $4.25, high of day was $4.36 and at 4pm closed at $4.29. Volume weighted average trade price for the day was $4.2918

On the TMX site more trades were listed at 4:10pm. Six trades printed, all done at $4.68
Selling brokers included brokerges with numbers 85,62,25,68 & 80. The TMX Member Firm Directory details those brokerages.

https://www.tsx.com/trading/accessing-our-markets/member-firm-directory

Question relates to the buying broker for all 6 of the 4:10pm EST trade prints - brokerage #100. Total volume printed for the 6 trades was 407,000 shares. Not mom or pop trading in their pajamas.

Who is brokerage #100 & what would be the probable reason for why the 6 shown trades were done at over a 9% premium to the day's volume weighted average trade price (ie. $4.68 vs $4.29)?

I'm assuming it's somehow related to institutional trading given individual trade volume sizes (250,000 on one print) but I would be interested to know a better answer. Ideas?

Thanks for insights and opinions.

Richard in PG
Read Answer Asked by Richard on December 06, 2019
Q: I sold WCP for the tax loss with the intention of buying it back after 30 days. Now that the 30 days has passed, I am questioning if I should repurchase it or if I would be better off with something else. It was my only energy sector holding and I am looking to fill the void with a new full position. What would be your best choice(s) for immediate purchase with the following criteria:
-Canadian energy sector
-Pays a dividend (can be small or large)
-Relatively strong balance sheet
-Will be able to weather $50 /barrel oil indefinitely but should nonetheless see some big gains when/if the Canadian sector turns around
Read Answer Asked by Steven on December 03, 2019
Q: I noticed when comparing both stocks (TDwaterhouse data base),
TOU : EPS =1.65, div/year = 0.48, P/E=7.6, P/CF =2.6
WCP : EPS =0.13, div/year= 0.34, P/E=32 , P/CF =3.2
If both have lots of cash flow, why WCP has much higher P/E than TOU ?, What is WCP doing with its cash ?, Is capex, paying debt, shares buy backs any of the reasons to explain their main difference in earnings? Can I assume that TOU has a better balance sheet and therefore is safer ? Thanks
Read Answer Asked by Alejandro (Alex) on December 02, 2019
Q: In a recent answer to a question on an oil company, you mentioned that it is hard to be optimistic on a company if you don't like the management team. So my question is, which of the management teams in the oil sector would you want to align yourself with, and why? Alternatively, which of the management teams would you not align yourself with? Please deduct as many credits as necessary to fully answer my question. Thank You.
Read Answer Asked by dean on November 22, 2019
Q: Hi 5iR Team, TD puts out a monthly consolidated report of its stock coverage universe. In the Sept. 30th report I looked at their Junior/Intermediate O&G stocks. I noticed that if I arbitrarily picked an upside % of 70% i.e. current price and TD's Target Price there were 13 stocks. The lowest was TOG at 70% upside and the highest NVA at 152%. In addition, some of the stocks like WCP and FRU are yielding 8%+. For me as an investor this is compelling data. Lastly, reading further into the report TD's O&G sector thinking as stated by their senior analyst is not Bullish. In other words TD does not appear to be exaggerating the facts, attempting to make some case for investors buying O&G stocks.........but the analysts in the field certainly feel incredibly positive on a number of Junior/Intermediate names.
How do I sort this out??
What would be 5iR's top Jr/Int. O&G picks?
Thanks team. Cheers, Chris

Read Answer Asked by Chris on November 19, 2019
Q: I have positions in these companies way way under my cost. Looking for a strategy to capture some tax loss without giving up completely in allocation in case of oil turnaround. Consolidation in less number of stocks that represents the best potencial is an option or selling all of them and buying two or three different companies is another option. Appreciate any suggestion. Thanks for your help.
Read Answer Asked by Saad on November 07, 2019
Q: Hi 5i: I have WCP, TOG and VET in my TFSA and RIFF accounts and I am down at least 50% for each. Would you consider averaging down for each? I will most likely carry each company up to 5-7 years. When do you think would be a good time to buy?
Thanks, James
Read Answer Asked by James on November 01, 2019
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