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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 5i! Saw this article on the potential resolution of Northland Power’s strategic review:
https://www.bloomberg.com/news/articles/2016-12-05/china-three-gorges-sdic-said-among-bidders-for-northland-power
The article mentions a couple of potential bidders and a recently passed deadline for initial bids but does so on an “individual who wishes not to be named” basis. What would be the best you could do as an estimate of potential upside on a bid, downside on nothing emerging, and probabilities of the various alternatives? I have a decent gain already, which I could book if estimations favor doing so, but I have hung in to this point to see how the review might go. Thanks!
Read Answer Asked by Lance on December 05, 2016
Q: REITS

My question concerns the viability at all of having REITS in an income portfolio. A Reit does not pay tax at the corporate level as long as their distribute the income to unit holders. Consequently the dividend tax credit does not apply.

Is a REIT therefore like a bond issued by a real estate company with the added tie in to the real estate market valuations ?

Would an income investor not be better off to simply buy a preferred stock from a real estate company that offers an attractive yield?

Thanks

Paul
Read Answer Asked by paul on December 05, 2016
Q: Hello 5I team.
I have positions in both BDI Black Diamond and HWO High Artic Energy. My average cost for BDI is $17.98 and the average cost for HWO is $3.75. Both positions are worth between $5k-10K and are part of my energy services portion of the portfolio. I am considering my options presently in regards to consolidating to one name or adding (3K) to either one. I am traditionally a long term holder and I am thinking I would like to bring down the cost of my BDI shares but maybe HWO is a better choice overall? Please advise me what you might do in this matter.
Thanks Jeremy
Read Answer Asked by Jeremy on December 05, 2016
Q: When I read thru the most recent MD&A, it screams to me that a turnaround is progressing very effectively. The new management had a massive mess to clean up. The sale of unleased single family properties to and post 09/30/16 as well as the resolution of all the municipal code violations/massive reduction in associated fines, gradual collection of former CEO funds owing with interest, paydown of expensive SSN and so on all seem very positive. I know this isn't something you endorse due to size and period of consistency, but do you agree with what I am reading that this ship is at least ostensibly turning around in a big way? Current management and board does have a solid track record with Firm Capital (FC) and significant insider ownership here, correct? Could you explain what the recent rights issue is about and how it works? Much thx!
Read Answer Asked by Tom on December 05, 2016
Q: Hello from the Responsible Investing Club in Comox, B.C.
Thanks for your great service!
Do you have any suggestions for an ETF that focuses on Responsible/Ethical Investing, which does NOT use a "best of sector" approach? (i.e. the "best" oil company, the "best" mining company, etc).
For example, XEN on the TSE has Suncor as its third-largest holding, which isn't something that many ethical investors could invest in.
Thanks in advance for your suggestions.
Read Answer Asked by Jonathan on December 05, 2016
Q: A few years ago you recommended to me the Powershares ETF QQQ for the IT portion of my holdings. It has been a very good performer, thanks. I also own CSU, MDA & ENGH.

Do you still recommend QQQ as your top ETF pick? Are there any other items you would recommend looking at. It can be a stock, mutual fund or etf.

Thanks

Paul
Read Answer Asked by paul on December 05, 2016
Q: Hi Team.
In view of the current market rotation, cyclical stocks are performing better. Could you identify three US and three cyclical Canadian stocks that could still outperform in the new environment. What sectors other than finance will benefit from the new administration in the US.
I value your opinion.
Thank you
Raouf
Read Answer Asked by Raoul on December 05, 2016
Q: We are involving our kids (ages 7 and 8) in choosing companies that they are interested in for their RESP holdings. They love watching their dividends get deposit into their accounts, almost as much as I do.

My son has chosen: CGX (because he likes going to the movies), L (because he sees how busy the grocery store and Shoppers are) and ICE (because he likes playing hockey and noticed how busy the rinks are where we live).

My daughter has chosen: CTC.a (because she likes to go to Sports Check to buy her sports equipment) and CARA (because she likes going to a few of their restaurant brands).

I added T, for some stability and extra dividends.

I realize this mini-portfolio is pretty concentrated in the consumer sectors. Do you have any suggestions to diversify things?

Also, given their age, what percentage of their RESP would you recommend being in equities?

Thanks in advance.
Read Answer Asked by Jonathan on December 05, 2016
Q: Hi, I've sold my REITs in my cash account but am thinking of adding two or three in my RRSP accounts for long term holds. Is this a reasonable move? I've noticed that your recommendations generally include CSH, CAR, and REI. I can't help but be attracted to the yield on AX. Am I "reaching" for yield and likely to be disappointed if I buy AX? What would be your top 2 or 3 REITs for an RRSP that consists of a balanced group of etf's? I'm looking to be a bit more conservative here than in my cash account which mirrors the balanced equity model fairly closely.
Thanks, Rod
Read Answer Asked by Rod on December 05, 2016
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