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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: Hello 5i team,

Not sure why my question does not reach you as I've tried twice in the past 2 weeks.......hope it gets through to you in this 3rd attempt.

I am 61 years old and about 16% of my overall portfolio is in bonds. The rest is in income stocks and growth stocks similar to 5i portfolio. The yield return of fixed income instruments is so low currently and I am rather comfortable owning income stocks. Now, I have $60,000 in cash in RRSP and I have the following options. Please comment on each option and your preference and recommendations.
1. To buy several corporate bonds with maturity of 3 to 5 years and to hold till maturity.
2. To buy more income stocks like AW.UN or EIF.un
3. To buy ETF of inflation bonds
4. To buy ETF of high yield bonds
5. To buy ETF of US corporate bonds

Please advise preferred ETF for option 3, 4 and 5.
Many thanks.
Read Answer Asked by Willie on August 17, 2016
Q: Hi, I am a value investor and note that Auto parts makers are trading at historically low multiples even though earnings growth appears intact. Can I have your favorite of MG, LNR and MRE with respect to the best 18 month to 3 year return.
Read Answer Asked by Uthaman on August 17, 2016
Q: The CEO has made clear that his number one objective is to grow revenue and to do so profitably. Short-intermediate term share price be damned. He is prepared to compromise earnings, increase debt and reduce margins to achieve this objective. At some point I presume he expects to drop revenue to the bottom line and show strong earnings. My question for you: is this a sound corporate development strategy and do you feel this approach will prove successful?
Read Answer Asked by Joel on August 17, 2016
Q: Hello Peter & Team, in my portfolio I have positions in all sectors of the economy except for materials. Other than gold stocks, could you suggest 2 or 3 names, in the materials sector, that have decent dividend and growth potential ? Thank you, Gervais
Read Answer Asked by Gervais on August 17, 2016
Q: Hello Peter:

Ithaca released their 2Q results on Monday and it appears that the FPF1 is on station and is in the process of getting its 14 anchors hooked up. What is your viewpoint of the results? Do you think that this stock is nearing the derisking point? I know that there is still a risk with dynamic commissioning of any platform but once oil starts to be produced in Nov the daily production should double to 20-25k a day. With the production starts where do you think this stock could rise to in a $50/bbl environment with an operating cost of $20/bbl?

Thanks,

Brendan
Read Answer Asked by Brendan on August 17, 2016
Q: Hi Peter, this company (Red Eagle Mining - RD) is way too small for my taste but has had a good run up. Does it look promising?
Read Answer Asked by Michael on August 17, 2016
Q: could you please comment on the recent activity regarding the Crescendo Partners' Letter? I have held this company for some time (avg price $4.75) and kept expecting to see it return to those levels only to be disappointed each new quarter. The letter definitely sums of my feelings, but not sure if it was the proper way to do it. Any guestimations on the sum of the parts if RKN decided to sell. p.s. wasn't too impressed with the response letter.
Read Answer Asked by Jim on August 16, 2016
Q: In concurring with Clarence's comments and observations around CXR.

This includes that management must have integrity and be honest I have learned.

To that point many CEO's, and high level management got to the position they are in due to their sales skills to the board of directors, the public and shareholders and thus meeting, talking with them and listening to them can often only make an investor vulnerable to their sales pitch of saying all is well, do not worry. I have learned that many big investors never talk to the management for this very reason. They do not want to get sucked in so they remove that possibility.

Reading the annual and 1/4'trly reports including the address and final notes can usually reveal the truth as the reports are reviewed by the company's lawyers and they do not want a law suit once they are published.

I understand that earnings and other #'s can me manipulated but over time this can be detected by looking at the other #'s. FCF, Free Cashflow cannot be manipulated as a company either has cash or it does not. They can lie about is but that would not serve them very long or well. Growing FCF year over year over year is one good thing to look for for sound well managed companies.

Also how the CEO is compensated which was over-looked by many in the case of VRX. Are they in for themselves or the long-term business and shareholders?

Read Answer Asked by Stan (1) on August 16, 2016
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