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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: Hi, I am considering BXF (combined with CBO, VSC, XHY and VSB) for my fixed income exposure. They will be roughly equal percentages totalling 30% of my portfolio. Can I have your advice about this? Would the take over of First asset by CI affect the underlying etfs? Are there any fixed income vehicles for taxable accounts (I was considering CPD)?
Read Answer Asked by Shyam on October 28, 2015
Q: For those who are considering buying Valeant, I recommend watching what a Rotman School of Business finance professor had to say about it today, on BNN. I attribute little weight to many guests that come on BNN, because of conflicts of interest, but Ramy is a professor who I have met and trust. His financial analysis methods are certainly modern and respected. What he said about EBITDA was also interesting/worrying considering how many BNN guests use it to back their ideas. dishttp://www.bnn.ca/Video/player.aspx?vid=736200
Read Answer Asked by Matt on October 28, 2015
Q: Hi Peter

What did you think about the earnings report. Was the lower reduction in working capital a red flag?
Could you please also comment on their knew joint venture

thanks Gord
Read Answer Asked by Gordon on October 28, 2015
Q: Hi 5i - a general portfolio management question:

Assume that I start with 20 stocks at 5% each. I have CPG, DH, CXI and AYA that are all down from the ACB. Say that those stocks mentioned are now varying from 2-3.5% FMV - assuming that I still like those companies (and the overall weighting in the sector makes sense), should I be putting new money in those stocks to bring the FMV back up to 5%? I am averaging down, but also re-balancing the portfolio - any suggestions?
Read Answer Asked by Neil on October 28, 2015
Q: Are there any other roll-up companies that you see as potentially being at risk of a short attack? None of the tech consolidators have been hit - could they be next? I bought a fair bit of puts on OTC and GIB.A today just in case.

Mike
Read Answer Asked by Michael on October 28, 2015
Q: A lot of short selling chatter around here. There is the case of Globo Plc a UK listed small-cap that immediately denied any wrong-doing last week before suspending their shares to formulate a response. Well the response was that the CEO and CFO resigned after dropping the bombshell that up to 60% of revenue was fictitious. Unfortunately I am still a holder of these suspended shares but fortunately a very small fractional position which was always thought of and treated as a "spicy ingredient" in my overall portolio. Sometimes there's really a fire behind all the smoke blown around by short-sellers.

My question is once the shares start trading again what would you imagine to be the response - with a potential 40% of revenue being "real" would you think this will survive ? An impossible question really but whatever opinion you have to offer is fine.
Read Answer Asked by mike on October 28, 2015
Q: Peter and Team,

What stocks in the Model Portfolio might fall into the category of "Roll-up companies" that seem to be getting attacked by short sellers lately?
Read Answer Asked by Marc on October 28, 2015
Q: Well, BNN just reported that BYD.UN, EFN, CXR, STN, and to some extent CSU, are being talked about for shorting. Apparently the "theme" is to attack "growth by acquisition" companies. This is getting really frustrating!
Read Answer Asked by Silvia on October 28, 2015
Q: On August 26, 2015 you indicated that the price drop of npr.un is due to the confusion of the investors with respect to the merger of npr.un with the true north apartment reit.Further, you indicated that it is not a "bad" deal. Meanwhile npr.un dropped another 7% since August 26, 2015. So far the stock dropped 40% during the last 12 months.
Do you still advise your members to hold this stock? Is the dividend approaching 9% safe? Are there any other new developments with respect to this stock?
Thanks
Read Answer Asked by Terry on October 28, 2015
Q: I have been invested in the markets for over 40 years, so i have had a few ups and downs to deal with, but so much has changed in the last few years, with now most of the trades being made by computers and the internet giving anybody that wants to say anything about a stock, right or wrong, it's getting more difficult to be a long term holder of a stock. Sure if you have been a long time rising stock, you can handle a setback, but lot's of investors get into a stock just before maybe some short seller hits the stock and you are down a lot. Yeah, people say if you like the stock it's a buying opportunity, but that's a tough one if you are now fully invested in the stock. It just seems now, that just about anybody can drive a stock down, with a jittery market. So which one do they pick next, you can hope that it is not one of yours, so maybe just hold cash and buy the stocks the shorts drive down.
Read Answer Asked by eugene on October 28, 2015
Q: What do think of Goeasy.
I would have thought it would be doing better in a sluggish economy..
Maybe something has changed at the Co?
Would you add to possition now?


Read Answer Asked by John on October 28, 2015
Q: Glenn Chamandy is on the board and owns almost 5 million shares.Is this a good gold company option rather than the big caps. Mines are in Quebec also.
Read Answer Asked by blake on October 28, 2015
Q: Good morning,

Could you explain the following concepts and how they are used to interpret what is happening with a stock:

1) Overbought (example DOL)
2) Oversold (example VRX)
3) Short interest (BNS @ 2.5%)

Many thanks
Read Answer Asked by Vee on October 28, 2015
Q: Further to Antoine's question, first valeant, then Davis Henderson and now Boyd is down 10% today due to rumours of a short selling report about to be published. This is ridiculous. I have positions in all 3 and now down significantly. I can't compete against insider manipulation and human greed. I will be reducing equity holdings and increasing GIC's etc. The stock market is not regulated enough to create an equal playing field. Any advice on Boyd is appreciated. thanks

John
Read Answer Asked by john on October 27, 2015
Q: Another Canadian roll-up targeted by shortseller. Boyd Group hit today, chatter that is on short attack $BYD.TO.
Frustrating --to say the least on these rollup companies

Read Answer Asked by Rick on October 27, 2015
Q: Hello Peter & 5i team,
First Valeant, now DH Corp ; what is going on ? We are facing a very unhealthy investment environment.
It seems that Canadian Securities regulations are not as constraining as those in the USA and short sellers take advantage of this with impunity ; but it obviously will take ages to sort this out.
In addition to that, it also seems that short sellers have a template approach to identifying vulnerable companies in Canada : (1) higher reliance on growth by acquisition and less on organic growth, (2) higher relative debt level, (3) complicated and less transparent ownership structures. Valeant would fit the bill, but DH ?
Both management teams have intervened, but to no avail : DH was up today by 11% at the open but is now down 5% in mid-morning.
I am exasperated by the situation even though the portfolio of stocks I currently own is up by 10% so far in 2015; however, making a major overhaul of the portfolio in reaction to the current environment would smack of paranoia.
Your soothing comments would be most welcome.
Regards,
Antoine

Read Answer Asked by Antoine on October 27, 2015