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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 Peter:
How would a Chinese housing bubble that actually came to burst (re: 60 Minutes last Sunday) affect the Canadian, U.S., and World, markets?

Thanks,

Don
Read Answer Asked by Don on March 05, 2013
Q: ESL just reported first quarter results. This line was included:

Operating expenses increased to $23.0 from $14.9 million in the prior year's first quarter and include incremental operating costs related to acquisitions as well as special charges related to restructuring of acquired operations. Non-cash amortization charges in the quarter were $3.6 million and include amortization charges for acquired software and customer relationships from acquired operations.

Buffett refers to these in his recent letter saying some are not real and it makes sense for the investor to adjust for them. Do you agree? Is this what the company is doing when they show adjusted EBITDA?
Read Answer Asked by mike on March 05, 2013
Q: Not a question but a comment. As a new/beginning investor (meaning new to investing myself because I got disappointed, far too late, with mutual funds & ETFs my "advisor" was putting me into), I'm paying attention to the message I'm hearing from 5i -- don't invest in "the stock market", invest in well-managed companies.
In the past few days, three of my new investments have reported results, not great but not really bad either. All three had immediate substantial drops in share prices, certainly much greater than what I would have expected given the results.
Which leads me to conclude that there are still too many people out their investing in "the stock market" and not in good companies! And skewing the market for "real" investors in the process.
The shares of all three (Capital Power, Parkland Fuel, Wajax) are, after the initial drop, slowly (sometimes very slowly <g>) coming back up . . . and in the meantime, are still paying the dividends that were a large part of my investing in them in the first place.
Read Answer Asked by Lotar on March 05, 2013
Q: I'm interested in Newmont (NEM) mining. Management has promised that their dividend is linked to the gold price. That sounds attrative if the biase is positive over the medium term. I feel like this is a good stock to have exposure to the gold sector, while be given a dividend to wait until the next upleg on the gold price. How does Newmont stack up with the other gold companies in your opinion?
Read Answer Asked by Eugene on March 05, 2013
Q: the comment below is from one of our analysts. Can you comment?
" Admitting you have a problem and cutting the dividend is a good first step. However, as we said in our email, the new payout ratio is still relatively high at about 70% and that doesn’t include any growth capex that they will spend. The big problem we see is that its debt to EBITDA ratio is up around 8 times. This is way too high and we wonder where the cash is going to come from to make debt repayments. Our guess is that they grind it out for a while, but it is ugly and it is going to take time to fix their balance sheet unless earnings get a lot better (not the company’s forecast)."
Read Answer Asked by Vicki on March 05, 2013
Q: I read with interest your recent report on EQI and was reminded of FN which i hold and wondered if you could comment on the relative merits of these two mortgage-related stocks. I have noticed that FN seems to be a bit volatile and I wonder if you had a comment on that. Thanks, Bob.
Read Answer Asked by Lynn on March 05, 2013
Q: CPX announced a new rate-reset preferred today. My question is, for the fixed income side of a portfolio, do you a) consider prefs an equal alternative to bonds and b) in this case in particular, would you be better off going for the common that has a 5.8% yield today rather than rate re-set that currently has a 4.5% yield? Utilities are likely in the 7th inning right now- is either a solid long-term investment in a non-registered account? Thanks in advance.
Read Answer Asked by Warren on March 05, 2013
Q: Have you ever looked at Olympia Financial (OLY)? I've held it for a couple of years and collect a nice 7% yield. Growth seems slack and the stock sits around $40. Any growth prospects here? And is the dividend sustainable? Thanks.
Read Answer Asked by Noel on March 05, 2013
Q: Hello 5i Team, Re: ENF.T,
I am a income investor looking at purchasing ENF for a long hold, realizing that growth expectations may not be much ,
...but hoping it would stay in the black for the long run.
Peter your Previous reply (Jan 22/13) you made reference about ENF having unfavourable reports towards it, 2 buys and 10 holds.
I’m a member of 5i for many reasons, one being that I have little faith in analysts predicting targets and even less faith in financial advisors.
Could you please elaborate as to why they gave the poor reports ? We all know the damning influence they do have with negative reports?
Also, please confirm any new outlook for ENF ? Your input is greatly appreciated and your service is cherished.
Read Answer Asked by Dennis on March 05, 2013
Q: Peter,

You sided with VIT a few months ago. Do you think it is a good play in micro cap gold. They have a lot of cash on the balance sheet which makes them safer. Thanks
Read Answer Asked by Imtiaz on March 05, 2013
Q: WJX
Wajax reported today. Not a pretty result. Is the slide overdone and is Wajax a long-term buy. Thank you.
Read Answer Asked by Geoffrey on March 05, 2013
Q: CSS Contrans just came out with their financials. YOY look very good. More to come?
Read Answer Asked by Gerald on March 05, 2013
Q: Hi Peter,
Any thoughts on the recent news that Rio Tinto is shopping around their 57% ownership in IOC? I'm wondering what the probability of Tata walking away from New Millennium ( NML) in favour of current production and known reserves with IOC? Thanks.
Read Answer Asked by Chris on March 05, 2013
Q: Hi Peter,

In your Sprott days you were a supporter of Sensio Technologies. They have recently signed many contracts with large companies such Disney(yesterday), Starz, and National Geographic to provide streaming 3D content on their new 3DGO service. These events in addition to their patents regarding Auto detect and 2D-3D switches and signing agreements with WiLan to litigate these patents seem to be great. They also have signed with the biggest two TV manufacting companies in China (HiSense and TLC)and Vizio in the States, plus have many agreement with the chip manufacturing companies installing Sensio chips. All of this is extremely positive. However, there seems to be no traction at all with all of the progress that they have made. It actually has been in continuous downward spiral! Is there something fundamentally wrong with their products/services? Who is their closest competitor? Is this just a matter of time?

Regards,

Arturo
Read Answer Asked by Arturo on March 05, 2013
Q: Hi,

When are the quarterly results coming out for kbl and css

Thanks
Paul
Read Answer Asked by Paul on March 05, 2013
Q: Hi Peter,

Do you know anything about Imvescor Restaurant Group (IRG)? There appears to be no analyst coverage on this stock so it's difficult to get much information. The 10 year chart has the look of a company that might be starting to turn things around. Any comments? Thanks.
Read Answer Asked by Robert on March 05, 2013
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