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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 am holding a full position (5%+) in each of ALA in a non registered account, PPL in a RRIF account, and ENF in a TFSA. I have decided that I am overexposed to the sector and
must reduce my positions. In your opinion which companies should be held for the long term and which should be sold? I also hold ALA.R in my RRIF as per your suggested opportunity, should the pending transaction be consummated.
Thank you for considering my question.
Read Answer Asked by Gail on October 10, 2017
Q: From the recent 5i report on Stantec: "Out of STN’s direct peers of WSP and SNC, we would
view Stantec shares as the cheapest of the group while offering
similar growth potential relative to competitors."

Comparing STN with WSP, which I hold, I see one cheaper on 3 metrics (STN - PE &
EV/EBITDA - by a whisker- & forward EV/EBITDA) and the other
cheaper on 3 metrics (WSP - P/B, PSR & Forward PSR)

The dividend at STN is half that at WSP. The 3 year performance at WSP is 50%
better. Would you endorse a switch from WSP to STN or if light on
WSP just direct new sector $$$ to STN? I wonder, too, if this is a cyclical industry that
would suffer with a real estate correction or business slump, say, or are there
enough government contacts which definitely are not cyclical?
Read Answer Asked by Jeff on October 10, 2017
Q: If the Canadian banks can ( total) return 13-14% consistently why wouldn't an investor just target them and leave the rest of the market alone? Your thoughts please.

“In fact, Canadian banks are the only sector/subsector in North America to generate a better total return than Warren Buffet’s Berkshire Hathaway over the past 20- and 25-years, which in our view speaks to the powerful and consistent compounding mechanisms they have been… In other words, based on their history of success, we have a high degree of confidence that they will manage their way through current headwinds,” Barasch said in the note.

https://www.msn.com/en-ca/money/topstories/canadian-banks-can-support-higher-multiples-rbc-capital-markets-says/ar-BByT3ZU


https://beta.theglobeandmail.com/globe-investor/as-long-term-investments-the-big-5-banks-are-hard-to-beat/article4506573/?ref=http://www.theglobeandmail.com&
Read Answer Asked by Mark on October 10, 2017
Q: Hi,

I am looking for a good emerging markets ETF. In my screens there are so many to choose from and many with high Dividends, along with very strong gains, which of course I like. Since I know nothing about which countries and sectors to look for, could you recommend 2 or 3 good Emerging Market ETFS, preferably with a solid dividend and high growth potential, and also at a value price if possible. I am not overly concerned about risk and have no exposure in this area. Thank You.
Read Answer Asked by John on October 10, 2017
Q: Like many others, I rely on my stock portfolio for income. Fixed income won't provide it. The possibility of a significant correction seems to be not a matter of if, but when, and the prospect of another 40% drop portfolio value is scary, especially at this point in life. Based on the past couple of crashes it takes 4-5 years of agony to recover.
However with a portfolio of companies having a history of NOT cutting dividends through the market crashes, the income relied on would be preserved, and the recovery period somewhat less painful. So thats the type of portfolio I'd like to see 5i construct. Rosenburg's recent comments on BNN suggest good balance sheet, predictable earnings, low correlation to economy. I would add liquidity, ( I find that a number of the stocks 5i portfolios just don't have enough trading volume).
Whats your thoughts on this strategy? Is there enough of these companies, and suggestions?
Read Answer Asked by Lloyd on October 10, 2017
Q: I've been looking for Canadian based ETFs which hold US techs. There doesn't seem to be very much available. The only ones I've found are QRT and FHQ, and the MER on the latter seems too high. Would you recommend either or would it be better to simply buy a US ETF?
Read Answer Asked by John on October 10, 2017
Q: Greetings 5i,

I realize you cannot give individual portfolio advice on this forum, but was hoping to ask a question regarding portfolio structure and exposures (rather than on the holdings themselves). However, if this question is inappropriate for the public forum, please disregard. If appropriate, please deduct as many credits as you see fit.

My stock portfolio consists of 30 holdings in the following structure:

- 19 Canadian positions covering all major sectors of the TSX (16 large cap dividend payers and 3 small cap "higher risk" names).

- 5 positions held in US Dollars (all large cap "blue chip" names) for currency diversification and to augment sectors I feel are far stronger in the US (Healthcare, Tech, etc.)

- 4 equity ETF's covering USA, Developed Europe, Developed Asia, and Emerging
Markets (1 ETF per region).

- 2 bond ETF's covering Canada and the US (1 ETF per region)

- No single holding exceeds a 5% weighting

I am 36 years old, debt free, conservative (although not totally adverse to risk), and consider myself a "buy and hold" investor.

In addition to the aforementioned stocks, my portfolio includes GIC's, gold bullion, and a small cash position in both Canadian and US Dollars.

In general, does this structure seem appropriate to you? Do you feel as if I have missed some region(s) and/or investment type(s)? Is there anything you would suggest for further diversification?

Thank you.
Read Answer Asked by Lucas on October 10, 2017
Q: Gentlemen
If commodity prices continue at current levels for the foreseeable future, what would be your current ranking, please, of these energy names.... in order of best to worst, to hold for future growth?
I hold for both income and growth.
Read Answer Asked by Peter on October 10, 2017
Q: Patriot One has just issued some warrants. I have never purchased warrants, but have a general understanding of how they work. I can buy them easily enough from my online broker. Are they just as easy to sell (considering there is enough volume)? I'm just not sure on the exit strategy. Thanks. Really enjoy the questions asked, and responses received.
Read Answer Asked by Brad on October 10, 2017
Q: Hi,

I currently own CANEXUS CORPORATION CONV.UNSEC SUB SER V DEBS 12/31/20 6.0000. With the takeover of Canexus by Chemtrade I tendered my bonds to CHE and then time passed and nothing happened. When I contacted my broker iTrade they sent me the following from the CHE website:

The final report provided by the depositary at the expiration of the Offers indicated that an aggregate principal amount of
C$19,475,000 CEI Series V Debentures had been tendered to the Series V Offer and an aggregate principal amount of C$12,576,000
CEI Series VI Debentures had been tendered to the Series VI Offer. Accordingly, as the conditions to the Offers had not been
satisfied as of the expiration time of the Offers, Chemtrade will not accept any tendered CEI Debentures for payment. All CEI
Debentures tendered pursuant to the Offers will be returned to the tendering debentureholder.***

So, where does this leave me as a Canexus bond holder and is there anything I should do or do things just continue as before?

Please advise.

Thanks

Sheldon
Read Answer Asked by Sheldon on October 10, 2017
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