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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: I'm considering buying a 5% share in CC & would appreciate your input on the company. I'm concerned about the debt which was quite high last year.The debt is $2.6B with a net leveraged ratio of 1.8 times on a trailing 12 months basis. Is this coming down or increasing?
The businesses, all three, seem to be doing quite well.Do you agree?Will there be further share repurchases or is it finished.What is the EPS & the free cash flow based on the US tax reform? Is it a buy or should I pass on it?
Read Answer Asked by Dave on February 26, 2018
Q: I hold the following in my TFSA: dol, dsg, gud, kxs, pbl, pho, sis, toy and byd.un. I have cash to add another position or increase some of the current holdings. All current holdings are less than 5% of total equity holdings. According to TMX dol and dsg are the lowest rated as low moderate buys and pho is not rated. I expect TFSA holdings to at least double and without crazy volatility. Please advise what I should do. Any changes? Thank you.
Read Answer Asked by Richard on February 26, 2018
Q: I have a general question with regards to stock splits. Why is it that companies don't seem interested in doing stock splits any more? I realize that stock splits don't change the value of a stock - you just get more shares at a lower price. But isn't there still logic in a lower stock price being more affordable to individual investors?
Read Answer Asked by Ralph on February 26, 2018
Q: Hi,
After the recent correction, US banks recovered (JPM, GS, C, BAC) but other finance sector stocks did not (AMP, MFC, AIG). Will future interest rate hikes will not benefit annuity business? At this pull back could AMP:N a good buy if I have some funds in RRSP to invest this year? I do hold TD:T and USB:N and MFC:T.
Thanks
Read Answer Asked by Piyush on February 26, 2018
Q: Hi Peter,

In light of Enbridges current price of ~ $43.00, I took the opportunity to take a look at historical yields on Enbridge, as I’m currently contemplating buying more. I was able to source data back to 1995, which turned up a few interesting things, specifically:
- The long term growth rate of the ENB dividend has been ~ 11%
- The current yield (6.3%) is one of the highest yields in recent years.
- The yield has traditionally bounced between 2% to 5% since 1995. The period from 2016 onwards (weakness in energy sector) has seen the yield “fatten up” significantly.

With this information in mind, it’s my opinion (which could be wrong!) that for a longer term investor who is patient, Enbridge is simply a waiting game. The current public sentiment towards energy infrastructure (pipelines) pretty much guarantees that nothing new can be built, but also guarantees that what is in the ground will remain full, as I can’t see consumption of hydrocarbons/energy falling off a cliff anytime soon. Over a 5 year period, even if one ratchets down ENB dividend growth to 5% annually, and one assumes that the future yield comes in at the high end of 6%, this suggests that the future share price of ENB would be somewhere in the neighborhood of $57.00 ($3.42 dividend/ 6%). While this doesn’t suggest a massive gain, it still entails a compounded annual ROR of 5.8% over this period, and this assumes a “low end” scenario. On the other hand, if ENB can maintain dividend growth of 8% (which is still less than their guidance of 10%) and the yield corrects to something closer to a historical average (4%) then this would suggest a future price in five years of $98.40 ($3.93 dividend / 4%), a compounded annual ROR of 18% over a five year period. The risk in all of this is that something catastrophic happens, and ENB chops their dividend, much like TRP did back in ’99 (or 2000?).
My request is therefore simple – let me know what the flaws in this thesis are, or if you believe it to be sound, let me know that it is. Thanks.
Read Answer Asked by Mike on February 26, 2018
Q: Is the correction over? If yes, technically when did it end? I know the technical correction start time; what technical event declares a correction has ended?
Many thanks for this, Elmer
Read Answer Asked by Elmer on February 26, 2018
Q: I have held BAD for a long time now and cashed out half my position when it was higher. Now it seems as if it is on a slow course down. I realize that there was a short seller report on it last yr that precipitated the downward trend but it has not recovered much. Should I still hang on or should I replace it with something else in the Industrial sector. I also have SIS and WCN. Thank you for your advice
Read Answer Asked by Teresa on February 26, 2018
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