Investment Q&A

Q: A friend of mine has $100K invested in RBC Select Conservative Portfolio Series (RBF461). She is 55, and those are all her assets. Her risk profile is conservative, and she has no investment knowledge. The fund meets her investor profile and risk tolerance, however the Morningstar Quartile ranking has been 3rd in each of the past 5 years and 4th in the 2 years previous to that. MER is 1.84%.

Could you suggest some other mutual fund (even from RBC), or ETF that fits her profile, but has better performance (like a 1st or 2nd Quartile performer from Morningstar).

Q: Comments on todays news? How would you speculate the stock will react?

Q: I would like your recommendation on ETF's or funds that would focus on Japan and India, preferably larger cap holdings. One or more recommendations is fine but I do want a Canadian dollar traded product as I don't want to get into the costs incurred with exchanging CDN to US.
Thanks for the sensible and steady advice you folks provide! Rob

Q: From your answer to Milan :
A diversifed portfolio of bond issuers (corps, gov, prefs, high yield) will earn a better yield and is more appropriate from a higher income need aspect. Bonds can actually see capital appreciation if rates were to decline, or even hold steady. Cash/GICs would not benefit in this case. Overall, we remain on the side of diversification. Hold a bond portfolio with various issuer types and add in some GICs and/or cash. How you weight these reflects your views and tolerance.
Could you suggest a diversified bond portfolio with various issuer types that should produce more than the 2.75% offered by Tangerine?

Q: Please publish how many shares of Vermilion have been sold short at present.

Q: I have a 650 share holding in Aecon ,with a 20% gain? With stock trading roughly $3.50 below the takeover price , do you recommend holding on with the optimistic view that It will receive government approval ? And will it be difficult to get over the net benefit to Canada hurdle?
It seems like the Chinese company is carrying some baggage.
Thanks for the great service.
Philip

Q: Any comments on reactions to news items following the private financing?

Q: I am interested in knowing what percentage of Spin Master's sales are to Toys R Us? And if the percentage is significant how do you see the company compensating for the loss of this customer in terms of future sales? That is who do you see stepping in to fill this void?

Q: What would your recommended REIT asset allocation be for a growth-oriented 33 year old who does not own a house? Currently own some Chartwell in a margin account. Would CAR.UN be your next choice? Is it advisable to own REITs in non-tax advantaged accounts?
Much appreciated

Q: Can you please further my understanding of enterprise value. I think it is the name that throws me off.

I fully understand how its calculation works, I fully understand how the ratios work but I have difficulty with the term. I feel like things are backwards.

For example: If we have a company that has a Market Cap of $1M, it has an enterprise VALUE of $1M (assuming no debt, no cash,...). If the company has a Market Cap of $1M and $1M in debt, it has an enterprise VALUE of $2M. This company has a VALUE of $2M vs the other company that has a VALUE of $1M. If these were 2 competitors, I would prefer the company with the LOWER VALUE (and that is the way it is but the numbers actually reflect the opposite). If I was buying the business, I would probably want to pay $0 for the company with the debt ($1M market cap - $1m Debt) and $1M for the company with no debt.

If a company has cash, I would want to pay market cap PLUS its cash / cash equivalent but in determining VALUE we deduct the amount. Once again it appears backwards.

I must be missing something here. Personally, per my understanding, I would have deducted debt and added cash to determine the VALUE of the enterprise.

It is the word VALUE that throws me off. Can you please shed some light on this. Thank You.

Q: Hi team,

TOY dropped by more than 7% on Friday, apparently in sympathy with Mattel. Do we know what % of TOY's sales will be affected without ToyRUs? Do we know how much ToyRUs owes TOY,(Actual number or as % of receivables)? Without ToyRUs, what other outlets TOY could use (brick&mortar or online)to sell its product? Are any of these outlets already sell TOY's product? How fast can TOY adjust/respond to these changes? How much Christmas sales are expected to be affected because of this disruption in the company's sale of its product?

Thank you for being the go-to-person for small investors!

Q: Hi I am looking to do some tax loss selling. DGC DOWN 25%, GUD DOWN 13%, RNW DOWN 5%, ENB down 5% and SIS down 4%.
Could you give me some options to repurchase for each company if I decide to sell any or all of the above?

Q: Hello 5i team members,
I am thinking of selling raging river for a tax loss. Can you tell me what might be a suitable replacement for it?
Thanks

Q: Rogers is up some 37% in a year, 54% since I bought it in 2015, not including the dividend, blowing await Telus and BCE. Clearly the addiction to cell phones and data is growing and NHL Gamecentre has to be a real positive for them in getting subscribers. Just expanded LTE wireless in Manitoba. Do you think there's still legs or has it ahead of itself. Sell and pay the cap gain taxes or hang on for more good things?

Q: Question about index returns, and whether individuals can exactly replicate. How does delisting one company and introducing a new company work? For an individual, we would have to sell a loser at presumably a loss, and buy a very small amount of a new company and wait quite a while to recover. But the index is market weighted. So how much of the new company is "bought" on introduction. A lot has been made of the importance of low fees on returns as they compound over decades. Is there a discrepancy here that might amount to 0.5% annual gain that real world investing cannot access?

Q: Hi Guys... the company seems to firing on all cylinders... with some pretty decent institutional holders...am i missing something...please advise...

Regards
Anthony

Q: Hello Peter,
I am very fortunate to have recently received an inheritance and am considering the following as inclusion into a TFSA. (SIS) Savaria, (SYZ) Sylogist, (ZCL) ZCL Composites, and (XTC) Exco Technologies.
I would appreciate any feedback you could offer regarding these considerations.
Thank you,
Rick

Q: I have read that the Fed dot plots are showing a 3% Fed Funds Rate within three years. That should imply a 10 year bond rate of 4% to 5% at that time. If so, would that be negative for bond proxies such as utilities, pipelines. telcos and reits? What about high yield corporate bonds? Should we stay away from rate sensitive investments and concentrate of growth stocks? I am a retiree with a need for income.

Thanks

Q: the company appears to have superior metrics to BCE, Telus and Rogers - P/E, EV/EBITDA, P/Free Cashflow and a 7.5% dividend. it also has dealt with some accounting issues. what do you think of the stock? do you think Brexit will affect the company?

Thanks Ken

Q: Over the past 5 years, MRT.UN is down to about $14 from its highs of $19 +, whereas MRG.UN is up to $15.60 from just over $10. Is this difference all down to the U.S. property market being better than Canadian in terms of growth ? Is that likely to continue ?

What is your take on these 2 REITS and on the sector generally ?