Investment Q&A

Q: Please list companies in your balanced equity and growrth model portfolios that are now in bear market territories and of those what would be your top 5 listed in preference to add to for a long term hold.

Q: I’ve read the previous questions about AAPL’s movement into the payments space and their direct challenge to SQ. I have LSPD, NVEI and GSY in the financial space. Given the potential reach of ApplePay and the evolution of Buy Now Pay Later (along with other innovations I may not even be aware of), could you please discuss potential future challenges that may negatively impact the 3 companies I hold. Thanks!

Q: What are your thoughts on NOW, PRL, GSY and PLRB. Would you buy any at today's prices?

Q: Please comment on the following possible risks to owning GSY:
1) Balance Sheet - 5i’s January report indicates it is strong, but Debt/Equity (as of Sept/21) is almost 160% (considering Long Debt only). My understanding is a ratio of 25% or less is good.
2) Interest Rates - Rising rates are generally good for Financials like Banks/Insurers since they hold lots of cash. I don’t think GSY holds deposits, so does that mean rising rates are bad for it?
3) Loan Defaults - Related to rising rates, wouldn’t GSY’s client base be quite vulnerable here?

Q: As a subprime lender, would GSY crumble in the event of a recession?

Q: I have 6K in my TFSA that I’d like to deploy. Presently the TFSA contains the following names and the weight for each one of my TOTAL portfolio (Margin+TFSA+RRSP).

EGLX 0.87%
GSY 3.75%
LSPD 1.62%
MG 5.41%
NTR 6.26%
SHOP 2.05%
WELL 1.94%
NVDA 3.42%
PLTR 1.33%
PINS 0.53%
TFII 5.74%
U 2.29%

Should I sell EGLX and PINS since they have dropped below 1% of the portfolio?
Should I add to one, two or three of these names? If so in what order of preference?
Or should I go with another suggestion? If you can list 5 in order of preference.
Any sector CDN or USA.
I will not need the cash for another 8-10 years minimum.
Thanks for all you do.

Q: This is a follow-up to our question from last week (see: https://www.5iresearch.ca/questions/140708).

Based on your response that nothing in the list gives you much cause for concern, we would understand this to imply none of the 30 stocks would be considered a "sell" today.

Please divide the 30 stocks into a pair of ranked (best to worst) lists, one of "buys" and the other of "holds". As well, for each of the "holds" indicate the principal rationale for caution.

Q: Canada Post is currently piloting a Canada Post MyMoney Loan where funds would be delivered from TD to help expand access to financial services (loans) for Canadians.

The personal loans offered by Canada Post and delivered with TD are available in smaller dollar amounts starting at $1,000 – and up to $30,000 – with flexible repayment terms ranging from one to seven years. As always with TD products, customers can expect competitive interest rates.

Do you see this benefiting TD in any significant way and also do you see this hurting a company like GSY.

Curious to hear your thoughts.

Thank you

Q: I’m a little confused by GSY’s recent stock performance. It has been correcting for a while, but that seemed to have accelerated with the tech sell off this month and I don’t see the link. GSY trades at a reasonable multiple and has earnings and earnings growth, but it seems to be down big when the nasdaq is down big and up big when the nasdaq is up. What am I missing? Similar to Costco’s behaviour where the business isn’t technology but because it is included in the Nasdaq it seems to track it. Is that due to selling pressure from ETFs?

Thanks,
Jason

Q: I have some new money to invest in my TFSA. I am well diversified in my other accounts, and am now wondering what to add to my TFSA. I am a senior so I would say about a 5 year time frame that this would stay in the TFSA, maybe more.
Any suggestions you have would be helpful.
Thanks so much for your help in the past, it has always proved very lucrative.
Shirley

Q: What is goeasy's track record for recent earnings releases? How has the stock reacted afterward? Thank you

Q: About 1 year ago we created an equal-weighted 'balanced' portfolio of 30 Canadian companies in a non-registered account. Most were chosen from companies either covered by a 5i research report or included in a 5i model portfolio. The remainder were chosen, based on the 5i Q&A section, from what appear to be 5i sector favourites. All purchases are made with the intent to be long-term holds (10+ years). As well, we intend to increase our investments over the next 2-3 years, and then adjust over time as needed. Currently the amount invested represents ~40% of the eventual total.

Although a goal is to keep the portfolio roughly equal weighted, of the 30 companies, the following 14 were acquired in 3 purchases (full position) and currently have weights in the 2.31% (SHOP) to 5.00% (ATA) range for an average of 3.71%: CSU, MG, GSY, WSP, LNF, ATD, ATA, SLF, BAM.A, BIPC, FTS, DOO, SHOP and TFII. The remainder were acquired in 2 purchases (2/3 position) and currently have weights in the 1.98% (BEPC) to 3.17% (TCN) range for an average of 2.56%. So, overall, the weightings currently range from ~2% to ~5%.

Over the next 6 months we will invest another ~25% of the eventual total. As we make additional purchases, we need to strike a balance between keeping the weights roughly equal while taking advantage of market opportunities. Please provide some broad guidance/wisdom.

Of the 30 companies in the portfolio, which 10 would you have the highest conviction in today? Please rank them.

Are there any of the 30 that you might consider as candidates to be replaced because there are better options, and if so, what replacements would you suggest and why (disregard tax considerations)?

What additional 3 Canadian companies might you consider adding to the portfolio and why?

As always, thanks for the great service!

Q: What are your three highest conviction growth stocks from your Growth Portfolio at this time. This for a long term medium to higher risk for my TSFA. I already have all the stocks in the Balanced Portfolio.

Q: I'm going to make RSP contributions (for myself and husband) in kind this year from a margin/cash account. Looking for the best candidates. I'd have to report a CG on GSY (376%)or ATD.b (394%) or KXS (210%).
Alternatively, CG on PBH and MG are 18% and 65% respectively.

What stocks (in order of preference) would be good to transfer to RSP? in your wise opinion

Thanks!!!

Q: Good day.

1. I am considering the purchase of mentioned. I did some quick research and noticed that on Jan 19th you mentioned in a response that it had a P/E of 15. Looking at its profile on your site and the BMO site, it shows 9.x.

If I look at the current stock price of $142 and its EPS of $15.66 (from its profile), this would correspond with the P/E of 9.x (which would not even be its forward looking P/E but its historical).

Am I missing something here? It appears to be a great deal.

2. I read your Jan 18,2022 report about this company. At the very top of the report (on the right hand side) it states that debt is high. At the very bottom of the report in the Summary section it mentions that that this company has strong balance sheet. Furthermore, this section and and "Key risks" section do not mention any concerns with debt. Is this something we should be concerned with? (Note; I normally look at the debt on the balance sheet but have difficulties understanding how to interpret this number for financial institutions as they have customer deposits on-hand as debt OR they would need to borrow money to lend it out which is also debt. Do you know of any articles that help explain this).

3. Do you think the business model is sustainable? I went on their web site and rates start at 30% for personal loans. That is high, really high (I feel).

Thanks again. Walter.
P.S. I recently posted a question and must have accidently posted it as private. If you want to make it public, please do so.

Q: When I compile your recent responses in the current January market, these two stocks popped out as looking like reasonably good buys now. Is my complier working okay (its pretty old)? Did I miss one or two better ones? Thanks as usual. Dan

Q: We recently initiated a TFSA for a family member (long-term buy & hold); the 10 securities purchased (in approximately equal amounts) were: Aritzia (ATZ), Unilever (UL), GoEasy (GSY), SunLife Financial (SLF), BAM (BAMa), WSP (WSP), Algonquin Power (AQN), Telus Int'l (TIXT), and an ETF called XUSR. Still have ~15% capital (~$12,000) to invest. Which 3 or 4 of these would you have greatest conviction to add to? And/or is there another security which would complement the above?

Ted

Q: Good day guys:
Can u provide a few names that are in oversold territory during this painful time in the markets .. I own well , lightspeed , and converge and I feel they are oversold and I am holding on .. I would appreciate your professional opinion please
Thx
Mark

Q: Hi 5i
For a TFSA which of these 3 would you choose at this time for growth .
I know you like all 3 but how would you rank for buying today? Thanks

Q: Can you define "secular compounder" and list a few Canadian companies which meet that definition and which you would find attractive today?

Thanks,