Investment Q&A

Q: Hi Peter, I have to confess that I became too greedy today and bought 5% of my portfolio at 45.20. In retrospect now I am thinking I took probably too much risk. I started buying CXR at CAD 86 and then bought some at CAD 65 and again some at CAD 50 and today CAD 45.20. Now it is 15% of my taxable account portfolio. My average cost is now at around CAD 55. Should I see some position?

I read TD Securities report and they have a Price Target at CAD $105. I read RBC report too and they have USD $86 target price(in their worst model it is USD $30). Also read Jason Donneville letter. Anyways reading at the reports and looking at your responses since 2014 for this company it seems to me it is significantly undervalued. As say 4.6X 2017 earnings(that is a PE a Bank deserves during a financial meltdown). So I am not sure what I am missing here. I know they have high debt load, but looking at their current debt to equity ratio(I got it from TD, can you please confirm from Bloomberg? Also I believe this is pre-amdipharm number), it is lower than Valeant. Anyways, considering healthcare earnings estimates are usually accurate(i meant not in vagary of economic downturn), what is the major problem here(that retail investor like me don't know)? Can you please jot down the risks? Also is there any possibility that they could not acquire amdipharm? Can you tell me from Bloomberg if any institutional selling recently? Can you elaborate on that? Also being a very popular stock why don't you guys please start coverage on it? Also what is your earnings target for this in 2017?

Q: I sold Wajax & Transalta. Can you please advise your best picks for replacements for these. Combination of dividend and growth is nice but primarily which have the most future upside in a recovery?

Q: Hi Peter, Can you please comment on the safety of GICs in Achieva Financial Credit Union in Manitoba? The website says its deposits are protected by Manitoba credit union deposit protection. How does that compare with CDIC deposit protection? My accountant swears by it and has money in it.

Q: Hi,

This stock seems to have lost its momentum compared to its peers. I have made good money on this and wonder if it's time to get out? I can't afford another AVO. What are your thoughts?

Q: This stock appears very volatile for a consumer staples. what are your views on short and long term outlook for this company?

I have small position at about $52. Is it sell, hold or add more at current levels?
thanks

Q: Hi 5i

Any reason CSU took such a drubbing on Thursday? -$20

Thanks

Q: I just wanted to follow up because I was specifically referring to Andrew Peller. I got this from the AIF: " In the event a takeover bid is made for Class B Shares, the holders of Class A Shares have no right to participate on such takeover bid."

Doesn't that mean the company could be taken over without an offer for the Class A shares?

Thanks!

Q: Hi 5i,

I often hear that the company is possible take over target. If that is the case, wouldn't it be better to be a holder of the "B" shares. "A" shares could be left with no offer. Am I missing something here?

Q: I am a multi-decade holder of POW. Could you comment on how the new mutual fund rules will affect its profits as it owns IGM?

Q: What do you think of MTY's earnings that came out today? Is the stock a buy, hold or sell at this time?

Best,

Carla

Q: Jason Donville just released his Q3 newsletter:

http://www.donvillekent.com/pdf/DKAM-Newsletter-October2015.pdf

It's always a great read, but I thought your readers may be interested in what he has to say regarding CXR. Please note this is the last paragraph of a lengthy discussion in the newsletter:

"So, where to from here? CXR has completed its equity issue and its underlying businesses are strong. But we also know the company is carrying more debt than we would like. Going forward, we think the stock is still quite undervalued but the company will need to address its debt issue somewhere down the road. This could mean that the company raises more equity or puts itself up for sale. Regardless, at current valuations, I think the company is worth a lot more than $50 a share. On our numbers, CXR trades on 4.8x 2016 Cash Earnings and 1.1x BVPS, while earning a 24% ROE."

Q: With there sale of some Colorado properties today, what is your outlook on this company. Thank you for the great service.

Q: Mitel is up today, ostensibly on news that Eliott Management Corp has initiated a significant investment in MNW and combined with their holding in another similar company is urging the board, I think, to consider merging the two. (please correct me if I am wrong). This type of shareholder agitation is not new but I am wondering what to make of it. While not all cases will be the same, in general it seems to me that these types of action - whether it be calls for mergers, asset sell-offs, special dividends etc. are essentially a condemnation of current management since if these ideas are so good the management should have thought of them.

The market seems to like this latest move as the stock is way up but if it is such a good thing, why didn't the current management initiate it? Should we continue to have confidence in the current management or is someone like Elliott, who seem to have a good reputation, just a smart group that thought of something no one else did?

Your insight is greatly appreciated.

Paul F.

Q: Just a note re your previous reply on CXR. Canaccord's target revision is in US$ to US$55. There's also an article here: http://business.financialpost.com/investing/trading-desk/the-lights-are-dimming-for-specialty-pharma

Q: Would you speculate as to what small and med. oil company maybe available for M+A. Thanks Jim

Q: CXR getting crushed again. I have been selling PHM to buy more, but that has been a bad strategy so far. I thought I was high grading the acct with this move, but instead I have been suffering. Any new news on this disaster of a stock? Comments?

Q: Hi Guys,

I have a large loss with a Fairfax Financial preferred (FFH.PR.I).

I was thinking of selling it and then purchasing FFH.PR.G. I would be in almost the same position as if I kept the original preferred but I would have a large tax loss to use. I would lose 29 basis points on the new rate and the reset would be a couple of months earlier but I would gain on the selling of FFH.PR.I ($15 bid) and purchase of FFH.PR.G ($13.70 ask).

Your comments would be most appreciated on this move.

Regards
John

Q: Are we seeing early warning signs of more downside to the stock markets given some of the recent bank results. National and CIBC in Canada, HSBC and Deutche Bank come to mind.
If we can legitimately connect the dots between these banking numbers and some of the softer US data numbers and the decision to hold off on interest rate increases might lead one to look for more safe havens if not head for the sidelines for a while.
I would appreciate your assessment of this environment.
Thanks.

Q: Hi Team,
Thoughts on dsg because I am debating adding to my position. However, could you recommend some companies with a strong balance sheet, preferably with low to no debt and that show a history of good use of capital. Are there any lesser followed/known companies that fits this criteria?
You guys still do an amazing job!

Q: Hi. I believe that CREIT is one of the more venerable and respected Canadian REITs. It has a beta of less than 0.3 which should useful in these volatile markets. It yields a respectable 4%. It is off approximately 20% from its high. It was upgraded this am. Can you comment on NAV, AFFO, and balance sheet/debt risk. It looks like a good buy here with a 10 to 20% total return over a year. UOM