Investment Q&A

Q: Despite posting encouraging figures, IT is down 8% today (in light of AYA's quarterly report?).

Would you expect IT to rebound better than AYA and over what time period?

Thanks as always.

Q: Hello, 5i. I am wondering if I should get rid of all or some of my bonds because of chronically low interest rates. I am in my mid-fifties and have forty percent bonds which do not look like they are going to do anything. Perhaps some of the bonds could be replaced with REIT's and dividend stocks.

Q: A 19 per cent yield in a zinc refiner? Still TD issued an enthusiastic report today with a $4.50 target price, 96 (!) % upside. The report goes into all the possible scenarios in the negotiations between NIF and Glencore. Payout ratio for 2015 is estimated at 44 per cent. Your opinion, please.

Q: hello 5i:
any chance of these shares going higher after the offer from the Chinese?

Q: A year ago Barret took a reserve charge of $80 million against unsettled claims going back a number of years. The stock took a tremendous hit. Almost a year later to the day their independent auditors have issued a letter saying that they will not be able to submit their reports by the Sept deadline because information that has come to light suggests that Barret may have created too large a reserve and that some actions may have been illegal. The stock has subsequently taken another huge hit before the market opened this morning. How can a company issue that kind of a letter without issuing a cease trade order until every one has access to the same information at the same time? Thank you for your help

Q: please estimate the 2 year future for this stock

Q: Hello Peter & Team,

Bought it @$14. Sold 25% of my position at $19.11 last May.

Saw your last comment end of Oct re the speculative shorting taking place. I do plan on holding for the long term but, would like your opinion on what effect the Fed raising rates (appears to be inevitable... again) may have on the price.

Thanks for all you do

Gord

Q: What do you think of the bought deal?

Q: As of the news regarding the purchase of MCI today, I hold approximately a half position in NFI. Of course, I wish I was holding more. As the acquisition looks to be a good addition for NFI, is it too late to bump up to a full position for a long-term hold? You've mentioned previously about buying momentum, and I'm wondering if this would be a good example for doing that, especially given the increased dividend and likely increased investor interest.

Thanks!

Q: Hello,

Is this market making investors hit the sell button for no real reason? Two stocks that I own at higher prices, IT and SWKS, I decided to add to in this three or four day pull back in the market. I woke up this morning and found IT down 7.5%, even though they seem to have a good quarter. SWKS, popular with seeking alpha, was down 5% because Apple had a hiccup. How much longer do you think this type of market will continue?

Thank you,
Dennis

Q: My question, as another recent subscriber asked, is will Sherritt survive? I noticed their 2018 bonds are trading at 62.25 for a 27% yield, and the 2020 bonds are trading at 60.25, for a 21% yield. First of all, shouldn't the 2018 bonds be paying less than the 2020 bonds, because the risks are increased with a longer duration? But my main question is, would these bonds be a reasonable investment? They are rated "B". All the company has to do is not go bankrupt, and one would get great yield for a few years, and capital appreciation if the company stays solvent and they reach maturity. Even if the company went bankrupt, I suspect the assets could cover a good part of their bond obligations. I would appreciate any thoughts you may have.

Q: This one dipped on good earnings. Please advise re the next 2 years.

Q: Peter & Team. Would you take a 40%+ profit on NFI following the jump today on news of the acquisition of MCI? I must say this looks like a stunning deal for NFI. In its own back yard (Winnipeg), MCI is complementary, immediately accretive and at 6X EBITDA, cheap - and a nice dividend increase too!!. But the low ROI in NFI has also been less attractive on what I regards as the Tesla of the commuter bus industry. Would you sell on this good news?

Q: Hey Peter & Team,

Caveat... It's a US company so I appreciate if you are not prepared to answer but considering the Canadian market right now, the US is where we need to be until O&G starts to return to it's old self.

In Feb 2014 I inquired about MCK and you replied with;

"solid blue chip company in the health care space. At 20 times' earnings it is not cheap (after a 70% one year gain) but we note a strong balance sheet, good revenue growth and solid earnings growth."

At the time it was at $176.50. May of this year it peaked at $240.61. As of today with the healthcare sector getting hit in the last 6 months it's around $182.00 which is the lowest it has been since May 2014.

It has a reasonable and very sustainable dividend. Guidance continues to be excellent on both the top and bottom, and they just announced a $2BB share buy-back program.

It appears to me this equity is considerably cheaper than it was back in Feb 2014 when it was $170/sh, and I am having a tough time finding reasons why we shouldn't expect this stock to bounce back over the $200 mark in the very near future.

Am I missing anything? Not aware of something? What is your opinion of its recent report and do you still consider it as expensive as it was in Feb 2014? Finally, do you think I should buy or hold?

Yours Truly

Gun Shy Gord

ps... thanks for all you do

Q: hey Peter & Team,

Tired of answering questions about this one? To be honest, I'm tired of hanging on to it while waiting for Fernandes to stop alienating his Management Team and continuously offering excuses to his shareholders.

As of today, I am a little over 50% in the red. It reports in a little over a week and despite my fully understanding your advice to never trade on report speculation, I can't help but feel we are going to hear more of the same.... spending for the future blah blah blah.

Please provide your advice... I am seriously considering sell AVO, eat the loss and replace it with FirstService Corp.

Good idea? Bad idea? Will a rate hike hurt FSV? Any others you would recommend for me to look at?

Presently, AVO is 4% of my holdings and I do not have anything in the Real Estate Sector.

ps... I must admit being a bit nervous of Canadian Real Estate at this time.

Thanks for all you do

Gord

Q: Hello team, Is IT dropping in sympathy with AYA or is there something we don't know?
Thank you!

Q: Just a quick comment regarding AYA and the reaction to them prepositioning to possibly issue equity in the future: remember, the last time they issued equity they did it at a 100% premium to the price the common stock had been trading at the 5 days prior to the Pokerstars deal.

Just some food for thought. If they issue equity, it may be a really good deal and accretive to existing shareholders like last time.

Q: Could you please clarify an answer regarding Amaya? You said that "It has paid down debt and bought back shares". But higher you said they are financing 3 billion (emitting shares). Are they emitting shares or buying them back? Thanks.

Q: Will you be changing your b+ rating of Amaya.

Q: In my RRSP Account, my Patient Home Monitoring position is down 60%, I'm considering selling it and adding to my 2.5 weighting in Concordia which I purchased this week. If I proceed, I'd have a 4% weight in CXR. I'd appreciate 5i's opinion to make the switch or hold PHM or a few more quarters?