Investment Q&A

Q: I notice a number of people here are thinking about diminishing dividends and going for capital gains instead. I know I am looking at that. It would be interesting to have an article discussing the relative merits of Canadian dividends. For instance, you wrote an interesting article recently about home bias in Canadian portfolios. i think one of the main reasons Canadian have lots, and maybe too much, in Canadian is because of the preferential treatment of Canadian dividends.
tbanks

Q: just a comment for the gentleman who posed the option of quitting and deferring his pension. One thing to always keep in mind is that in some company pension plans, if you defer your pension you lose eligibility for retiree benefits which in some cases can significantly reduce your risks in retirement significantly. Extended Health care benefits in retirement can be a significant benefit so if you are considering deferring your pension, make sure you understand what happens with any Retiree Benefits you may be eligible for.
Publish at your discretion

Q: NFI seems to have fallen below its 50 day moving average on Friday. Assuming that its cash flow can still maintain the current dividend level, and management does not cut that rate, would you consider NFI to be a decent "bottom fishing" candidate?

Your insight is much appreciated.

Q: Hi,
Can I get your take on recent earnings for PIF.TO and whether you think it is a buy here based on valuation.
Thank you.

Q: May I have your comments on this quarter please.

Q: Retired, conservative dividend investor. I consider a "full" position to be around 5%, which is reserved for the likes of "true blue chips" (BCE, BNS, RY, FTS, TRP, etc.) and lower weights for non-blue chip. I hold the following securities, with the following weights:
CGX = 4.4%
NWC = 2.7%
PBH = 4.8%
TCL = 3.3%

Q#1 = Regarding topping up, I am virtually at a full weighting with CGX and PBH. Based on today's Qtr results for CGX, would you top it up?
Q#2 = Given my blue chip comments, would you add more to NWC? I was thinking of moving is to 4%.
Q#3 = Regarding TCL, I am down (surprise!). At $15, it is looking very interesting. Depending on the width of your pencil, it looks like a decent level of support right where it is now...versus catching the proverbial falling knife. Current strategy = wait for Qtr numbers June 6...agree or add a bit?
Three questions...please deduct 3 credits.
Thanks...Steve

Q: Can I get your thoughts on Brookfield's (BAM.a) earnings, today, vs expectations.

What do you think of their valuation against the backdrop of a diminishing FFO (Scotia estimates: 2019 FFO of $3.78 vs 2020 FFO of $3.75)

Lastly, can you comment on their debt levels. Looks like a significant decrease in debt levels in expected in 2019.

Thanks.

John

Q: I have a relatively conservative portfolio with gold, bond and low risk ETF and stock elements. I want to add a little bit higher risk, higher reward portions to it. Can you rank the above four companies?

Q: I would like to know what the Management and employees have been doing other than collect salaries for the past 5 years, other than a few small acquisitions and filings with the authorities it seems to me that they do not deserve much compensation. I can't see them "working" 50+ hours a week looking at investments day in and day out year after year. What have they been doing? Goodman raised a ton of money at $10.50 or $11.00. I would like to see Goodman and his management team paid a salary of $1 per annum (just as Steve Jobs did) and be paid with stock options, not at the current value but at $10.50 or $11.00. I have put my faith in this guy but like a lot of shareholders I think its time to move on from Goodman and his underperforming company. Goodman's talk of an overnight success for my grandchildren does not give me much comfort. I was hoping for more of a shake up yesterday and was disappointed it did not occur. The fact that his Dad owns a company that competes with Knight was something new that I did not know when I purchased GUD shares.

Q: My question is about keeping a defined benefit pension with a former employer or transferring to a LIRA to invest in index funds/market etf's. I keep hearing that the plan is great (PSPP Gov plan) and that I should leave the money in there because you are paid for life at retirement. But I'm trying to wrap my head around why it is considered so good. From my point of view I see my 75K sitting in this plan year after year not growing. Supposedly it accounts for inflation (not sure if only when I start claiming or now that i've left plan), but they say around 1.5% adjustment. I still have minimum 20 working years left. In my mind it seems like a no brainer, I transfer to a LIRA invest is 3 market index funds predominantly US, then CDN, and a little International. If I achieve a 6% return I have 240K after 20 years vs 75K. Yes there will be ups and downs but over 20 years I should do pretty well. Am I missing something? Why would someone stick with the pension that doesn't grow or barely grows, just for safety at the cost of much bigger returns?

Q: Please comment earnings. Thanks.

Q: Hello 5i,
I’ve held Toy for a few years. When Toysrus hit last year many of us wrote in expressing concerns about the impact on the company questioning the growth prospects for spinmaster. It seems that management underestimated the impact because it keeps coming up in conference calls. As much as I’d rather not ask this question: should we question the skill of management to manage through this shift in landscape?

I held on to Ebix. Can you comment on earnings and offer an opinion in relative risk between it and CRM( on watch list but no position yet). For a long term hold which would be a better hold throug a market correction?

I’m underwater on sq and want to average down. Should I wait for a better opportunity to bring weighting to 2%? I know 5i is not thrilled at timing questions but how do tech stocks perform over the summer?

Please deduct three questions.
Thank you.

Q: Is it time to bail on NFI or are the worst of the operating issues behind them? I have owned it since 2015 and saw the shares rise from $17 to $60 a year ago, only to half the amount today.
The Q1 results are not encouraging. Operating cash flow is a deficit of $7 million, earnings were down 46% or 56% adjusted. Gross profit margins declined Q/Q by 240 bps to just 16%. There have been substantial investments in new products (with learning curve troubles), a new zero emission bus, facility upgrades, a new parts facility (with start up problems and cost overruns), IT harmonization project, oh and they lost the Setra distribution rights in the motor coach division.

Concerningly, on capital allocation, they have increased the dividend with lower earnings and have a substantial debt funded share buy back. Annual interest is now about $25 million. This looks like brave policy unless the business really is about to turn the corner and shares return towards their $60 level.

What do you think?

Q: I have decided to only keep a few stocks and follow the Growth ETF Portfolio. Of the 10 stocks I have mentioned above 9 are listed in your BE Portfolio with the exception SHOP. All have done very well for me SHOP up 568%, CCL,B up 180% ,SIS up 159%,MG up 112% and the rest all up between 11 and 42%.So my question is do I keep them all? Sell some ? Any suggestions appreciated.Paul

Q: EIF was purchased two years ago at $35.69 with a dividend - now it is $36.03 - what do you see for the future of this stock - should I add more, hold or sell.
Thanks for your advice.

Q: Would you consider Newell Brands a buy at these levels or is it a value trap?

Q: What did you tXP earnings? Looks like they are successfully moving into the packaging business....what is their payout ratio?
Thanks

Q: The Ag sector seems to be somewhat out of favour possibly due to Chinese trade actions. Between AFN and NTR, which company offers the best combination of risk / reward for a long term hold?

Q: what are your thoughts on conv debs as fixed income. The yields are
quite attractive but some consider them equity like. "they are not
bonds and will get hurt in a recession" What are the risks and are they
legitimately fixed income ? Companies like AG Growth, CargoJet, etc.

Q: Hi team,

What do you think of Colliers recent investment in Harrison Street? When I see the words 'transformational" in a headline, it gets my attention. ;)
What will it add to the top and bottom line...if anything?
It has dropped around 10% in the last few months and is about 25% off its highs.
Time to step in for a 1/3 position?

Cheers,
Steve