Investment Q&A

Q: Hi

I am looking at Home Capital. The market cap is ± $1.5 billion dollars. The balance sheet indicates that Home capital has $1.2 billion in cash, $535 million available for sale securities and $2.6 billion in senior debt. I calculate the enterprise value at ± $2.365 billion.

The net income for the past twelve months stands at $247 million. The net income for the quarter ending December 31st was $50 million or $200 on an annual basis. Income and cash flow provided by operating activities for the year ending in 2016 were respectively $789 and $561 million. The cash flow looks unreasonably high. Is Home capital really generating that much cash ? If Home capital can earn $200 million in net income and $500 in cash flow for the current fiscal year, would you say that the company is selling at a discount?

Also, I am aware there is a cloud over the unexplained departure of the CEO, the alleged mortgage fraud and the mortgage rles have changed. Why is it that a publicly traded company do not have the obligation to explain why the CEO was fired?

Q: I have just taken my RRSP account back from my investment adviser and am in the process of liquidating the 23% which was in mutual funds. I am looking for advice as to what to replace these with. I have four years before I must start withdrawing.

Q: Hi There,

I want to begin deploying funds towards the balanced portfolio. Can you please tell me which 5 names you would add today, based on the current price of the individual stocks. I know it's not a great strategy to try and time the market, but I plan on adding 5 at a time over the next couple months, and figure there may be 5 that I'm better off starting with.

Thanks!

Q: Hi guys,

After many years of successful investing, I've finally opted for a 'margin' account. While I don't plan on using the margin excess for further long exposure, I would like to try shorting a name or two (I'll keep the positions small, maybe 2% each for now). Are there any good short candidates that come to mind? I want to avoid the battleground stocks (VRX, HCG), but would love to find something that is just a real dog.

Thanks,
Mike

Q: How are the dividends and potential capital gains from KWH.UN shares treated from a Canadian tax perspective?

Q: Hello Team, Todays Globe reported a lot of Insider Buying last week in TWM. It's not a company I follow, but a quick look at the company business and fundamentals seems to suggest TWM could be placed on my watchlist. In addition, the 3% dividend is ok. What are your thoughts on TWM, Buy, Sell, Hold.
Thanks Team

Q: Not a Q. Keith asked about high dividend stocks. Another is HOT.un. You seemed to like it too from a March 9 answer.

Q: what is your advice on Cannacord? I have at a loss in a registered account, now about 3% of portfolio.
Thankyou.

Q: Is this a good buy at this level? How it would behave if market goes down? Do you think it is cheap on price to book value valuation metrics compared to other insurer(like Merkel, Berkshire)?

Q: Regarding Hector's question on T1135 filing on 120K of USD holding.

Just a reminder to be careful when considering "value", the 100K filing requirement is not based on current market value but the cost amount or ACB, it includes cash and only applies to non-registered account, the amount is based on an individual basis, i.e. value in joint account has to be calculated separately.

Q: We have done very well on this name, so it has become one of our top holdings from a very modest position. It just had its best 6 month on the chart. Are the fundamentals all there? I like the idea of their mobile phone offering : Ting. I think one of the big names might like to buy them to take them of their oligomarket, this is my reason for having kept so far. Your opinion is valued, always.

Q: Can you suggest any 8 - 9% monthly yielders? Willing to take risk.

Q: One report I read stated that to finance the acquisition PKI would issue 24 million shares to raise $660 million. That works out to $27.50 per share and the shares are currently trading near $31. In one of your earlier responses you also mentioned that shares would be issues at a discount. It would almost make sense for anyone like me who holds PKI to sell now into the market and buy back at the new issue price. Your thoughts?

Q: You seem to like Crius. Where are the earnings?

Q: Looking to add 2 positions with good income & some growth potential. I've been watching KWH.UN & DIV. Long term time horizon. Not drawing on income. Any feedback is appreciated.

Q: Supposing no one buys GMP, what (if anything) will turn it around? Shouldn't the resource-extraction recovery make some difference here?

Q: I am always leery of a company where the insiders do not have any or perhaps very few common shares--Instead they have--options--multiple voting shs--performance share units--subordinate voting shs etc.Common shs mean to me you got some skin in the game--I dont understand all these other classes of shs---TOY is a good example of this.I dont like options thats no commitment at all and hurts the share price.Should I be concerned about these other classes of shares? What do they all mean?
Thanks--I have just had your portfolio review and find it very helpful--would reccommend it to any body.

Peter

Q: I understand their tanks are made from fibreglass which is not a barrier to competition unless they have a patent. Am remembering Poseidon which made oil storage tanks and took off until they crashed. Do you know whether ZCL's oil and water tanks are protected by patents? Thanks

Q: I have USA stocks with a value of 120K with Canadian Broker.
Do I need to fill out Form T1135 and if yes which box do you think it applies to me.

As per simplified reporting method
I need to check boxes that apply to me
Funds Held outside Canada
Shares of non-resident corporation (other than foreign affiliates)
Indebtedness owed by non-resident
Interest in non-resident trusts.

Thanks for your help.

Q: Hi, I have the above stock in non registered account. As of today I lost $4000 US , bought it at 102 and now $67 $ US. What do you recommend? Sell it and claim loss or wait till it recover or add more to it. I added to it when it became $70 US. But it seems it is not doing well. I appreciate your ultimate decision on it or if there is any US solid stocks that you recommend. Thanks