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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: Please discuss dividend distribution schedules, monthly vs quarterly, in the context of DRIPS ("synthetic" DRIPS, by the brokers or trading platforms, which typically deal only in whole shares). A DRIP investor would want a dividend payment & schedule that yields sufficient dividend to buy new shares with the dividend.

SIS, which I recently added to my TFSA, has just changed to monthly dividends -- with not enough dividend to DRIP monthly unless I add more SIS, putting my SIS holdings at an uncomfortably-high allocation. My KBL has been in the same situation, for quite some time now.

What influences management to go to monthly from quarterly distribution?
Read Answer Asked by Lotar on September 28, 2017
Q: I am a retired, conservative, dividend-income investor with a well diversified portfolio, including a company pension, CPP, annuities, Fisgard Capital, and equities via RBC Cdn Equity Income, Sentry Cdn Income, Sentry Global REIT, ZLB, XIT, AS, ALA, AQN, BCE, BNS, CSH, CGX, ECI, FTS, PBH, PEY, ABT, RY, WCP, WSP and a small position in Sprott Energy. Looking under the hood, this portfolio has 33% of its value in non-Canadian assets, which is at my comfort level.

Question 1 = I know portfolio make-up is very personal, but when is there too much foreign content in a conservative retirement income portfolio? Adding ZWE pushes my foreign content over 35%.

Q2 = most of the distribution for ZWE is capital gains, ROC and about 30% interest income. I plan to put ZWE in my cash account...make sense?

Q3 = I already have roughly 22 securities, which is plenty enough for diversification. I am hesitant to add more, but I think ZWE makes a good fit. A second alternative would be to continue to "trim and add" as the allocation #'s make sense. A third alternative would be to simply add NFI to top up my industrial allocation.

Thoughts please...thanks. Steve
Read Answer Asked by Stephen on September 28, 2017
Q: I have been reviewing HNL's financials and I find it difficult to determine the company's cash and cash equivalents at the end of Q2. I am concerned about the solvency of the company, its ability to continue the dividend and its prospects given the Alberta political and general sector risks. May I please have your insight.
With appreciation
Read Answer Asked by Ed on September 28, 2017
Q: Please discuss share price issues in terms of the cost per share. Using CSU as a specific example, their price is nudging $700, which effectively means that an investor either has to have a rather large portfolio in order to buy in blocks of 100 shares and stay within reasonable "position" limits, or buy only part blocks, say 5 or 10 shares. Is there any real downside to buying such small partial blocks? What would make management NOT split the shares when certain levels are reached (such as my NA shares did not too long ago)?

Thanks for your continuing education!
Read Answer Asked by Lotar on September 28, 2017
Q: Hello,

I am currently holding 2,000 shares of Callidus Capital Corporation which I acquired earlier this year at an average cost of $16.53 per share. I have seriously considered selling these shares at the substantial loss they now pose to my portfolio but have been hesitant to do so.

I am hesitant in part because I perceive that 5i may be of the opinion that the firm might yet be taken private by some means, at a substantial premium to today’s share price. It is also my impression that 5i may possess some level of confidence in the management of Callidus.

I have combed through the firm’s 1st and 2nd quarter 2017 earnings announcements and I have several questions about Callidus that I hope you may be able to assist me with.

• Are my perceptions regarding 5i’s outlook for the firm and faith in its management team accurate?

• Are you able to help me understand exactly how much money Callidus Capital Corporation has invested in Bluberi Gaming Technologies Inc., in aggregate?

• Do you know what remaining value Callidus may be currently attributing to their “investment” in Bluberi Gaming Technologies Inc.? In other words, have they already written down or realized any losses attributable to their investment in Bluberi?

• Was any portion of the money Callidus Capital Corporation currently has at risk, in connection to their investment in Bluberi, ever transferred from Catalyst Capital Group Inc. to Callidus Capital Corporation? If it was, are you able to explain to me the pretense or conditions under which the transfer of this risk might have been conducted?

• Callidus has themselves been buying back shares in the firm at substantial premiums to the current share price over the past number of months. Do you perceive this as a potential positive development or might this somehow further diminish the value of the company? Why are you of that opinion?

• Hypothetically: If you personally owned shares in Callidus and selling all of them meant you would crystalize a loss of 3% of your portfolio’s total value ($12,570.00), would you sell them and move on or would you continue to hold them in the hope you might obtain greater value for them within the next twelve months?

As always, I value your opinions, information and insight. Thank you!
Read Answer Asked by Richard on September 27, 2017
Q: Hi,

What is your list of 5 stocks which seem to you to be irrationally under-priced today?

Thanks,

Gord
Read Answer Asked by Gordon on September 27, 2017
Q: Hi 5i,
When structuring a retirement portfolio (with no major pension for income) many investors try to optimize income from dividends and sometimes interest. Do you have any comments about using a total return approach that factors in not only dividends and interest, but capital gains as well? My thinking is that some of the capital gains could be realized as another form of income by selling a portion of a growth holding. Any further thoughts about how to decide what percentage of the equity portion of the portfolio should be dividends vs. growth (capital gains)? Also, in your view does this broader approach increase or reduce the risk/return tradeoff overall? I realize this is a complex question but any insights would be appreciated.
Thank you, Michael
Read Answer Asked by Michael on September 27, 2017
Q: From 1-5, how would you rank the FAANG stocks on growth prospects over the next 5 years? How would you rank them on risk profile over the same 5 year period?
Great website.
Thanks
Read Answer Asked by Dave on September 27, 2017
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