Investment Q&A

Q: The market has now pushed SGY to a 20% dividend yield. Have any of the compnay fundamentals changed or is this just the ongoing energy sector crash? Do you have any guesstimate as to how much a dividend cut might be and do you think the stock will rebound a bit after the cut, independent of the status of oil price?
Thanks again! John

Q: When can i buy a company back that i sold for a loss. I sold it on the 17 of dec and the settlement day was dec 22. thanks

Q: Morning or should I say mourning ... although I am expecting a large dividend cut can you tell me if Surges stock price could actually go under $2 and if the company is strong enough to withstand this pounding?? Is it a takeover candidate? Thanks as always.

Q: I know 5i isn't about the charts or predicting price movements, but the chart of Silver Wheaton SLW from April 2013 to today is shockingly symmetrical. I'm no expert on charts but one would think there's something meaningful in the pattern. The question is, "What happens to the pattern from here?" If the symmetry continues, and looking at a two year chart, the stock is setting up for huge burst to the upside. Any thoughts?

Q: I respect the opinion of David Rosenberg at GS as an astute macro economic observer. He is quoted in the National Post saying "Eurozone financials, meanwhile, are much cheaper after severely lagging in 2014. As a result, the strategist thinks the group has more upside potential than downside risk since some trade at single-digit multiples.

He also pointed out that European stocks as a whole offer a 3.7% dividend yield, compared to below-60-basis-point yields on German 10-year bunds.

“The ECB has no choice but to get more aggressive so the euro remains vulnerable, but that should be positive for large cap exporters,” Mr. Rosenberg said.

It's hard to believe European stocks as a whole offer a 3.7% dividend, so he may be referring to Eurozone financials here. What ETF or other way of investing would you suggest if one wanted to follow his advice to get this kind of yield? Thanks, J.

Q: How will increasing rates affect the distribution of this fund? I recognize that the stock price will likely get hit further, but shouldn't the dividend be safe or even have potential to increase as they roll over loans at higher rates? I have held for about 18 months, and am just up slightly taking into account dividends. Would you continue to hold, if holding for income only? Do you view this stock as more equity or more fixed income?

Thanks

Q: BDI seems to be settling down somewhat after recent severe weakness. Do you think it is advisable to dip a toe in the water on this name in a TFSA? Realizing that patience will be required and more volatility may follow of course.

Q: Could I have your opinion of PLUG now that it has declined a fair amount since your last report. It signed a new contract today. Do you see much growth in the future? Thanks

Q: what is your opinion on the neulion acquisition, the issuance of stock and debt and the fact that the ceo of dix will become ceo of neulion. dave

Q: Peter, can I please get your thoughts on MIC and Google as long-term holds? Thank you.

Q: Yesterday, reports from different sources started coming out saying that canadian auto sales are doing great. Can we therefore expect their next quarter to be great? Or do you think that it is likely that the dealers that did well are those outside of Alberta and since the company has most of its dealers in Alberta, we might see little positive impact? I suppose it depends on how confident people in Alberta have been feeling about a rebound in oil and in the safety of their job.

Q: Yesterday I asked a question about three sectors.You recommended Enbridge and Pembina for the utilities sector.Tmx show both companies as being in the energy sector which I am overweight already.Could you clarify this for me. Publish if you think it is necessary.

Q: Happy New Year to all! I am looking for the top 5 canadian corps that have at least 60% of their business in the US and would appreciate your picks. Thanks for all your excellent work this past year

Q: Should I add to existing long term positions in essential energy services and/or total energy services at this time. I am a long term investor and not disturbed by short term volatility. Thanks!

Q: Happy new year!
I am thinking about adding RE and SGY....
Could I have your opinion please.
Thank you!

Q: Peter - you have in the past written about the power of 10-baggers. I think I remember a piece when you were at Sprott where you astutely pointed out that a couple of investments could be wiped out, provided a portfolio contained a couple of huge winners. I wonder if you might offer your five most likely 10-baggers in the next 1-2 years, knowing full well that such wins are always elusive.

Q: All my holdings are Canadian, but I would like to get some exposure to the US while keeping in Canadian dollars. An actuary friend of my husband told us that Manulife tends to move in a leveraged manner with the US markets because of its pension portfolio. Would this be a good way to get the exposure I am looking for, or are there better ways?

Q: hello, i was hoping to get your latest opinion on crescent point as oil prices continue to look to be going lower. wether it would be a buy, sell or hold. or any expert opinion you have. also i would like to ask the same of Raging River TSE.RRX . thank you. also with oil prices lower, are there any buys in this sector that look attractive ? thanks for your time. - Brian.

Q: Below is an email received from my discount broker TD and wonder if you could shed some light on it.

If in fact this is valid could you provide some details and recommendations on companies that would be appropriate for an RRSP

Monday was another day of falling oil prices and energy stocks. Yet the great slide in oil prices has also created an irresistible opportunity, says Hanif Mamdani, lead manager of the $3.6-billion PH&N High Yield Bond fund with RBC Global Asset Management: Energy bonds are on sale for bargain prices.
Specifically, Mr. Mamdani, one of Canada’s shrewdest fixed income investors, has been drawn lately to the senior debt of high quality, Canadian oil patch firms he believes have the balance sheet, management intelligence and experience to ride out the effects of the ongoing oil supply glut. He won’t disclose what or how much he’s bought but says it’s “material.” “It’s turning into a fairly compelling opportunity,” Mr. Mamdani says.
Here’s how he sees the play in the oil patch: spreads on senior bonds for firms such as Precision Drilling Corp., Baytex Energy Corp., Western Energy Services Corp. and Trilogy Energy Corp., have jumped by between 300 and 500 basis points since July, giving them annualized yields of nine per cent to 11 per cent. In many cases, the bonds come due in four to five years.
“These are solid companies that have very reasonable balance sheets,” he says. “Many of them generate free cash flow even at [current] crude oil prices. They’re run by extremely competent managements that have been through many cycles and have vast amounts of their own wealth invested.”
In some cases, low oil prices don’t have a uniformly negative impact. Take Precision: it has slashed capital spending plans, but while it isn’t spending money to build new rigs, it will continue to collect cash for rigs already in service. That can be used to retire debt or support its dividend. “At some point people will realize Precision bonds are yielding 10 per cent for a company with low leverage,” he said.
In other words, a compelling opportunity: all investors have to do is buy the bonds and hold them to maturity, and they will earn nine per cent or more so long as the companies don’t default. Should oil prices rise, risk premiums fall and the bonds appreciate in value, those returns could rise to as high as 20 per cent, Mr. Mamdani figures.
And how likely is a rebound in oil prices in the next four years? Consider the precedent, says Mr. Mamdani: Low prices should crimp supply and stimulate demand, while economic growth sops up the surplus. The price of oil may not have bottomed, “but to assume [the very bottom] will be the time to buy energy stocks and high-yield bonds is naive,” he says. By then it will be too late.

Q: Hi team:
I made a small profit by investing in the above thanks to your advice
With the drop in crude oil prices, will it decrease the value of Bep.un ? thinking of taking some of the money off the table
like to hear your opinion, thanks