Investment Q&A

Q: How do the last 4 Q's results of NWC look to your analytical eyes? Can you give me your views on the bull/bear case going forward?

Many thanks for your help.

Q: For the average person with a long time horizon and want to invest in stocks in the form of ETFs, what do you think is the optimal distribution of US, Canada Europe China etc? S&P 500 seem to have done better historically than other markets. But does that mean I should only invest in vfv?
And what do you think of the weighting of VEQT?

Q: Hello ,
Is there a reason why well health is ticking higher and Propel keeps moving downwards to the lower 20s range? Thank you and much appreciated.

Q: We have accounts in RRIF and TFSA. We like to keep approx 6 months of cash in case of economic downturn. Is this too long a period or keep 3 months and invest the rest to produce income. I thought maybe because of interest rates starting to come down it maybe would change economics to positive. Will elections play a role with all the gov't calling elections in the future. we have pensions and dividends that keep us happy .We live within our means.Thanks 5i

Q: BB is in a downtrend, but why 10% and 5% in the last 2 days? Anything on the proposed split? Thanks.

Q: With approx 17% of their revenue coming from one customer (Apple), would you consider that too much single customer concentration risk for Broadcom? Thank you

Q: Hi Team,
I had to trim some Nvda today to manage weighting size in my portfolio. What are some of your best idea “forever holds” today that are standing out as strong buys at current levels ? Either cnd or US. Or is it recommended to hold some cash for a while if it looks like the market is due for a pullback??

Thanks,
Shane

Q: Hello 5i Team

I currently own shares of Canadian Western Bank (CWB) and National Bank (NA) in my TFSA.

The yield on the shares of CWB are approximately 1 % higher than yield on NA

The announced takeover of CWB by NA is at at a share ratio of 0.45 shares NA per 1 share CWB.

NA announced an public offering of NA shares at $112.30 concurrently with the takeover. This implies a price of 0.45 x $112.30 = $50.54 for shares of CWB.

This morning share of NA are trading below the offering price (~$110.40) and the share price of CWB are trading around $42.35 which implies an exchange ratio of 0.39.

Is there an opportunity to acquire shares of CWB at a small discount to the takeover premium (with the risk of the deal not being approved by the government) in the anticipation of the takeover and exchange for shares of NA or should I just let the deal close in 18 months (end of 2025)?

I would receive marginally more dividend income from the share of CWB while waiting for the deal to close.

I also think there will be selling pressure on CWB for the next two weeks as investors may be inclined to sell CWB in anticipation of the June 25 change in capital gains inclusion rates.

Thank you

Q: Hi 5i, for better growth over the next 3-5 years would a switch from to TD to CWB, so as to take advantage of discount, make sense? I'm worried about TD being put in the penalty box for any new US acquisitions.

Thx

Q: Hello

I recently submitted a question on TD, expressing concerns about possible lingering ill effects due to the money laundering episode. In a nutshell, 5Is position was that there was little concern on their part about TDs future and that most banks are subjected to the same money laundering threats. Just received this presser:

"Toronto-Dominion Bank's anti-money laundering program will take longer to cure and could have a greater and more damaging impact on the bank's franchise and earnings power. After confirming TD Bank's AA credit rating in May, additional shortcomings in the program, controls and operational risk-management practices have surfaced. Morningstar expects additional investment in risk and control infrastructure and expected monetary and non-monetary penalties, as well as the ongoing attention of leadership on remediation efforts, will act as earnings headwinds. There also is a risk regulators conducting investigations will reveal other related and/or unrelated issues, it says."

Still little concern on your part?

I did sell a third of my TD holdings after receiving your input. It was my largest holding.

Carl

Q: Am I correct in thinking it is highly unlikely that ROKU goes to zero? Would you currently consider it a buy, sell or hold? Thanks.

Q: I recently read an interview with Jensen Huang from back in 2017 where he went on record stating that AI will eat the software industry. It's a bold statement, but it appears many are expecting this thesis to play out. So my question is 2 fold.... do you see the larger upside within Tech on the chips side (picks and shovels) vs software going forward? And, is the acquisition and vertical software integration model with CSU the safer play within the software industry and more immune to declining margins like we recently saw with large enterprise software companies like CRM. Thank you!

Q: Hi,

The last question asked in 5i about this company was by me nearly a year ago. Since then they have purchased a few companies some of which are loss making and that they seem to have overpaid for, They blew most of the $541 million they had and the companies they purchased are in India/Italy where they can't use their tax losses. Admin. expenses have skyroccketed. Now there's a proxy fight. I'm thinking I should vote my shares with the minority (26%) shareholder to replace the management of the company. It seems like they are a bloated, self serving group of directors/managers that should be booted. They still have around $100 million that they haven't blown yet. What do you think?

Dave

Q: Hi 5i - how would you rank the following tech companies at todays prices for new positions:

LSPD, LMN, KXS, SHOP, CSU, GOOG, DSG

Thanks, Neil

Q: What would you consider the risk out of 10 would be for ATD, EQB and TOI???....thanks tom

Q: Thoughts on ADBE quarter?

Q: Hello,

I have done very well and am very happy with my investment in CSU - thank you.

I would appreciate your insight on characterizing the return one receives from a co. like this.

Einstein called compound interest the 8th wonder of the world and IMO the return from CSU seems to be a phenomena beyond that.

With SHOP your return is based on capital appreciation. If it goes up you win - goes down you lose.

With BCE your return is based on a dividend and possible capital appreciation. Almost a paid rent for your money invested and with a hoped for capital gain.

With CSU the actual dividend (rent) is miniscule, however the spin-offs are like a special dividend (equity rent?) with a shared equity multiplier plus capital appreciation of the mother co.

In the past 4 yrs my CSU stock has tripled in capital value and spun off co's that their current value works out to 16% annual return. The annual growth of these co's are also expected to grow.

You have long spoke positively of CSU and maybe now, with some data, I am just seeing why.

Thank you

Q: Are any of the other large Canadian Banks similarly exposed to investigation/prosecution in the U.S. for the same activity that TD was convicted? Also, can to tell me what % of each banks total business revenue comes from U.S. sources?

Q: Hi
I recently learnt about the AI energy consumption issue. What opportunities/threats does this issue pose to investors? Are there specific subsectors or types of companies (within the energy sector) that will benefit from or be hit through the course of the AI story?
Any specific recommendations ETFs or stocks?
Thank you

Q: Jason D. mentioned PRL uses AI & credit unions to make loans rather than the usual face to face. Presume there are cost savings. Can you expand on these details?

Now that GSY has reached a loan book of $4bill. & has a $6bill. target for the end of 2026, can you make a guess as to what that might mean for earnings? Has there been a relationship on their journey from $1bill. to $4bill.?

Jason D. mentioned whispers CSU is getting set to do another spinoff. Hear anything? Maybe that accounts for current weakness in LMN.