Investment Q&A

Q: hello 5i:
in a recent question, asked by Justin, about the new Liberal gov't (hmm, interesting, I know his last name can't start with T), re: infrastructure plays, you advised that WSP, STN, SOX, AND BDT would be some companies that would benefit. I can see that, but wouldn't companies like SCL and BAD benefit even more? After all, they will be doing the groundwork where most of the money is spent and have the lowest valuations due to the hits they've taken.
Just wondering
Paul

Q: Hi Team,
I own atd.b and like it. However, I would like the perspective of somebody who might not like it (other side of the trade). Could you please give me possible reasons to not like it. Hopefully this won't be bad timing since it is having a small correction. I think it will be good practice to get an unbiased view.
Thanks, keep up the great work guys.

Q: With the sudden share price drop of Progressive Waste Management (BIN), I am considering the purchase of more shares in the company which at current prices constitute approximately 1% of my family’s investments. A simplistic examination shows debt to be high, price to book in excess of 2 and my crude forward estimate of PE to be about 30 if current earnings continue for the next year. All of these are negative to a purchase; however, as you have alluded to in the past, it is a growing company so one cannot expect low PE’s (although currently they are showing negative growth and assets are reducing). To further investigate I listened to the company’s webcast of October 19 which strongly suggested the downfall was mainly due to mismanagement in the Western Region exacerbated by flooding in Texas earlier this year and FX issues. With the background of the CEO in finance, it is understandable that he would not be quickly attuned to operational and maintenance problems in this important geographical area of the company. The 5i thorough review of the company rated it as a “A-“; which was my original reason for purchasing shares earlier in the year, and the Webcast presentation provided support for my plan to purchase more shares at the current depressed prices. In further investigation, I noticed that CEO and CFO significantly reduced their holdings in late August and all officers essentially eliminated their holdings at the same time. The only purchases from insiders were by directors during September. This disposal of shares 1.5 months prior to disclosure to the public does not give me a good feeling. Am I totally misguided in regards to insider trading prior to disclosure being an important issue? If so I plan to purchase more shares for at least a 5 year time frame since before the management issue, you showed strong belief in the company as shown by placement in the Model portfolio and your “A-“rating. As always, I very much value your opinion in terms of share disposal by insiders, general current metrics of the company, possible re-rating of the company, and any other thoughts you may have.

Q: Do you think it is safe to buy CGX at these levels; it is just off its 52 week high. Do you think that Star Wars is already built into the price or can it go up from here. Thanks

Q: Hi team, What are your current thoughts on Norbord as opposed to WEF? Thank you.

Q: Any comments on this R play?
Thanks
Jean

Q: Insta-Teller's of major Canadian Banks such as CIBC are now promoting the withdrawal of US dollars from their machines. So a Canadian who needs US dollars can now go to their local bank branch, even after hours, and get US dollars from a machine. Super convenient way to get US dollars for any Canadian with a bank card. Will this eat into the business of CXI in a meaningful way? Or could this serve CXI if they get their licence and the Banks outsource the currency conversion work to CXI?

Q: Is there a reason the TSX is down 1.83% (at 3:36 pm) when the oil price is up and the S&P 500 only down .32%?

Publish if you wish.
Thanks
PB

Q: What is your opinion of Canam? Did they exceed quarterly expectations this week?

Q: Just out of curiosity, will you be doing any events out on the West Coast (Vancouver)? I'm sure there's a legion of readers (myself included) who'd love to get a chance to meet and chat.

Q: Hello team,
On Monday last week, I purchased a 10% position in Valeant. This was after seeing the videos on BNN on both side and also asking you a question about my decision to do this. I reasoned that I am a long-term investor and I would not touch this money for at least another 10 years. This has not changed. What has made me question my original decision however is the promise of new report that is even worse, further reveals Valeant’s accounting practices, and shall “nail” the company following their presentation last Monday. I didn’t think philidor story could carry that much weight in the end and that is why I bought in. Now, I think where this whole story is going to stop with a masterfully planned report releases to do maximum damage. Would that point be “beyond point of repair” for the company?
I know everything is possible and I know you cautioned me against too much weight here. I made the mistake and I learned my lesson. My question here is how much I have to pay for the lesson. I know that the additional loss on Friday was a response to the news for this Monday release and the damage is already in the stock again. What I am asking here is: should I look away and ignore all of this noise or should I at least try to lower my weighting and reduce my overall losses. I will be still holding the company if it happens to be around 10 years from now.
I think time is the only thing I have on my side as a retail investor. Andrew Left and other short sellers have made their money. Bill Ackman will make money by averaging down. And perhaps, I won’t lose money if I sit still and don’t react at all.
What do you think?
Having you guys at 5i cannot be appreciated enough during such times. Thank you!

Q: Can you comment on the latest quarter, sustainability of the dividend and your comfort with this name for longer term income investors? thx

Q: I am a retired investor looking for income. Corporate reset preferds look interesting at discounted prices. At what measurements are they reset? Can you recommend any thanks Paul

Q: hi guys. husky will issue its dividend in common shares this quarter. what are the tax implications for shareholders. stephen

Q: I own HSE at $23 for the dividend, which will be pad in shares. I'm considering selling HSE and buying PEY for the jump when oil moves. What do you think?

Q: Yesterday TD was wildly enthusiastic about the proposed merger of SPB and
CUS. The market seems lukewarm about the deal. What is your opinion about SPB's future, and its dividend? Thanks.

Q: With the recent news of the Quebec gov't stepping in to save the day (for a while at least), would Bombardier be worth a shot, at the moment? Probably 1 to 2 %. I'm willing to gamble, but also not crazy. Bombardier has always been the-little-engine-that-could-but-never-did, in my mind. And yet ... how I hate those Canadian companies going down, just because they're stubborn and set in their ways. Will there be enough torque behind the gov't's presence to help move the Bomber's needle? Thanks, as ever.

Q: Why is so much emphasis put on comparing a company's recent earnings to analyst estimates?
It might be because the market is generally a forwarding looking mechanism, but, call me cynical, could it be of benefit to both the analyst and the co. to have the co. beat expectations as they seem to 99% of the time?
A comparison of recent earnings to last year's comparable period would to be a better metric.
Your thoughts would be appreciated.

Derek

Q: I wonder if you are able to clarify Knight's business model with respect to the degree it aquires companies and then agressivley jacks up the price of existing drugs. This unseemly practice appears to be one of the big complaints about Valent and the possibility that legislators will go after drug companies and bring in regulations. I do not see that explicitly referred to in your 5i report but would like your opinion on this matter. I want to make money like everyone else, and I have read Ryan's blog on Valeant, but to the extent that the allegations in this regard are true, it seems a risky business model (and probably unethical) to me and the public at large. Thanks

Q: I bought some stock in Luxottica a few years ago and I want to get your advice on whether I should sell or continue to hold.