skip to content
  1. Home
  2. >
  3. Investment Q&A
You can view 3 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: The company has just issued more shares in a bought deal. I am trying to understand if this is beneficial/detrimental to shareholders and the company. In my mind, on the negative side, there is dilution, the stock is to reduce debt (despite the fact that debt should be cheap these days) and not for acquistion, and it brings to market more shares when the shares of this company haven't done much for quite a while anyway.

On the plus side, it brings attention to the company since the underwriters will now be beating the bushes to sell the stock and less debt should increase company flexibility should a deal come down the road.

I know you like companies that don't tend to issue stock. Should this deal be viewed as negative? Also, I assume the difference between the share price to the underwriters and current market price is the dealers profit. Typically, how long will dealers hold onto shares to ensure they don't flood the market and lower the share price vs. sell the new shares in an orderly fashion to maximize their profits.

Appreciate your insight.

Paul F.

p.s. love all of the new changes
Read Answer Asked by Paul on April 27, 2016
Q: Hi Peter,Ryan et al. My daughter age 32 has $32K to invest in her TFSA. My initial thought was a half position in CAO and KXS along with full positions in BNS. ATD.B CTC.A,PBH,
and HCG. Any suggestions and comments would be appreciated for at least a 3 year time frame.
Thanks in advance.
David
Read Answer Asked by David on April 27, 2016
Q: Hello Peter,
Any idea why Tourmaline oil's stock price hardly moves or moves lower whereas Birchcliff Energy and Paramount resources continues to climb higher given that paramounts' balance sheet is not as good as Tourmaline's. Thanks
Read Answer Asked by umedali on April 27, 2016
Q: If purchased in US $ on a US exchange, do these companies pay their dividends in US$ Take as many credits as necessary.
Read Answer Asked by Edgar on April 27, 2016
Q: Dear 5i,
I have a half position in CCL.B and have been waiting for a pull back to buy more. I see the Winpak has had an excessive sell off. Do you think there may be more opportunity with Winpak vs CCL at this time for my other half position?
Thank you,
Kerri
Read Answer Asked by KERRI on April 27, 2016
Q: I own ZWB. When interest rates rise, I suspect that individual high quality rate reset preferreds will have a greater increase in price than ZWB. What do you think? If you agree, please provide the name of a few rate resets with the 5 year renewing base rate. Thanks.
Read Answer Asked by Tim on April 27, 2016
Q: I bought Home Capital before it ran into trouble with some of the lenders. I hung on and then I got a notice about a Dutch auction. How is that different from a company just buying it's own shares on the open market? Do you see a benefit to this auction? I read that Home Capital will soon have insured lending. Could these two events move the stock out of the dump?
Read Answer Asked by Deborah on April 27, 2016
Looking for more? Sign up for a FREE 14 day trial! No credit card required

We invite you to sign up for a 14 day free trial of 5i Research!
Experience all the benefits and tools we have to offer; stock research, model portfolios, Q&A with our experts, and so much more. Join a community of like-minded investors today!