Investment Q&A

Q: Hi Peter and team, I have held PWT and LTS for several years and am down about 75% in both. I also own CPG which is about even. All three have good assets but seem to go nowhere. Your thoughts would be appreciated. Thanks for the great service.
Gary

Q: What are your thoughts on SMT (Smart Tech)? I'm still underwater (bought the IPO) big time and was wondering if I should hold or sell? If sell, what stock would you buy in it's place. Thanks.

Q: Greetings Peter and team. Would you be so kind to take a look at the stock Axiall Corporation (AXLL). It has a forward P/E of 9.12 a PEG ratio of 1.35 price per sales of 0.70 and price per book of 1.23 Thanks.

Q: Hello Peter

Thank you for the really excellent video on the Top 5 Investment Questions. First Class!

I have carefully reviewed your comments on Sherritt [S] especially your answers on January 20, 2014 (asked by Richard) and on November 22, 2013 (asked by Chris). Subsequently Sherritt did slash their dividend. I am unsure about Sherritt's level of secured and unsecured debt which may be quite large and pose a threat, and there may be "off balance sheet" issues too.

We hold a large position in Sherritt Senior Unsecured Notes due 11/15/2018 with an 8.00% coupon, making up 3% of our overall portfilio or 10% of our fixed income portfolio

You would think that the sale of the coal assets and the dividend cut would reduce risk on the Notes, and I realize that this may be a "cleanout quarter" for the company before the crucial May 6th meeting, but I would value your opinion on their stability. The current quote is $99.50 which would suggest they are not under undue stress.

If advisable I would gladly sell these notes and switch to something with more safety and a lower yield. I read your recent comment on CBO [iShares 1-5 Year Laddered Corporate Bond Index Fund Common Class] and the 4.25% dividend yield would be acceptable but I am unwilling to take on the capital risk in a security with no maturity date, in a possibly slowly rising interest rate environment. Gaining 4.24% income with a possible 3-5% capital loss in a year is pointless and I might as well just buy a cashable 1-year GIC at 1.6%.

We already own a large number of good dividend common shares [RY, CM, BNS, NA, LB, OLY, SLF, GWO, TRP, ENB, ENF, PPL, BTE, PKI, POT, T, EMA, FTS, BDT, S, LIQ, NWC, NWH.UN, CSW.A, RSI, CJR.B, G, FNV, SLW, CGL, SVR] so have some quite good dividend income.

The other 90% of our fixed income is in a mix of long provincial bonds maturing 2027-2032 yielding over 6% on their purchase prices, and an Algoma Central Corp Conv Unsec Subord Debs 03/31/18 6.00%, and a small position in FAP. We also have about 5% in cash equivalents, one modest employment pension and two OAPs and CPPs. On your advice (January 23, 2014 asked by george) and for which we thank you, we just sold our Perpetual Energy CV 7% 31DC15 [PMT] at $98.00 at a small profit because of extreme company debt and bought Telus [T] with the proceeds and are quite happy with that.

So we don't particularly "need" higher yields now but I am a little reluctant to go beyond our current 66% weighting in equities, however this may be the only realistic option. I would not be keen on preferreds, even rate reset preferreds at this time, as they have no maturity dates and I have sold all mine advantageously a year ago. I am also not a fan of REITs,and don't want ETFs much preferring to own individual securities, and there is not much point in buying 1-5 year government bonds at this time.

I am retired, investing for a 20 year horizon, and am mainly looking for secure income, modest growth [although more is better and must be balanced against risk], stability, steadily rising dividends, and the liklihood of relatively better performance in a major market correction which, like death and taxes, will come for sure some day and we must be prepared to ride out any downturn without undue worry.

If there is a major market correction in the next couple of years, Sherritt may fare quite badly and the notes would be very vulnerable. Maybe if we need to be concerned at all over the Sherritt Notes, and if we are going to worry over them, we should just buy some "dull" but stable equities with acceptably lower but rising dividends, lower payout ratios, and good growth, like CNR, ALC, KBL, BCE, THI, taking advantage of the dividend tax credit, and pushing our equities up to 70% of the overall portfolio? Is 70% getting too high? We don't seem to have any other choice.

My apologies for the long question. I would welcome your suggestions as to what to do with this security.

Many thanks........... Paul

Q: Hello, could you tell me which stock you would own between Precision Drilling and Brookfield Infrastruture. We are not traders and prefer to buy a stock and own it for some time. We are looking for security in value and dividend income. We have a well balanced portfolio and are only looking to invest about $10,000 in this purchase.

Q: Hi, I have done well with CGI (GIB.A) and am up 120%. I have been thinking of selling half my postion to "play with the house's money" and use the proceeds to invest in CSU. I like to be well diversified. Or should I sell my entire position and invest it in CSU? I have no other tech exposure except a small position in ESL. Tech is only about 5% of my portfolio but it has one of the better performers for me.

Q: I have just read a member`s note thanking you for the new report entitled "5 from 5i" but I haven`t been able to find it on the site.

Thank you for the clear concise (jargon free) helpful answers you routinely provide.
e.https://www.5iresearch.ca/questions#sthash.ZQlmd33K.dpuf

Q: Do you see the natural gas sector as being a good place for new money, and if so what would be your top three picks? Thanks.

Q: CCL.B has major portion from revenue from abroad, therefore will benefit from weaker $. Your opinion please. Thanks.

Q: Hello,
In my portfolio's "catch all" services segment (12.6% weight), I hold ATD, BYD, CGX, DOL, KBL, and THI; I think that they are all good but if I were to shed one of them, which would you suggest?
Thanks,
Tony

Q: I bought i-shares Silver Trust SLV:NYSE at the end of 2012 on a "timing the market/cyclical pricing play" and subsequently watched the shares sink. They have recovered some ground recently, but is there a better option to play the expected increase in silver prices? Is there a stock that pays a dividend and still has as much chance of growth as SLV, or should I just stick with it?

Q: TGZ reported a loss instead of last year's profit. Would you sell here?

Q: Could give me your opinion on Express Script (ESRX)? Would it be expected to benefit from obamacare? I know it is not your main field of expertise but would nonetheleass like to hear what you have to say.

Q: Could i please have your opinion on the latest news from athabasca oil(ath).
Thanks for your great service.
Garry

Q: Can you tell me how the fall in the Canadian dollar will impact Stella Jones ( SJ )

Q: I WOULD APPRECIATE AN UPDATE ON FCU

Q: hello could you please explain what tkm just announced about shelf Prospectus and Registration Statement
thanks

Q: Hi team,
When a stock opens up in the morning down over 10% because a refinancing share issue, is it a good time to buy?
How would I avoid buying a stock just before share refinancing?
When placing a buy order, how long should you closely watch the movement of a stock before buying it? I've seen stocks up during the day approximately 3-4%, and give back all their gains when the market closes. If you buy early and this happens, are you out of luck?

Thanks,
Dennis

Q: Hello Peter and 5i Team,
Over the past few months I have been working on restructuring my RRSP . I have room to to purchase 3 more stocks/ ETF's after sellling the weeds. I would please like some suggestions on what else to add for diversity and growth. I am 40 years old so stocks can be held long term. My current holdings are:
CNQ, HSE, IFC, MFC, CM, TD, MDA, SJ, BYD.UN, T, CGX, and CSU, DHX, PG (procter and Gamble) and DEO
I am open to any other feedback or suggestions.
Thank you for all your help,
Kerri

Q: Hello 5i Staff.
My question is: I wish to offset an amount I plan to borrow, $15,000 at 4% fixed for 4 yrs, rather than unduly deplete my TFSA or RRIF (I am retired). I would like to have a couple of stocks i.e. a $15,000 purchase, to be reasonably certain of garnering a 4% income from the stock(s) with negligible risk to the capital. Slight growth would of course be a bonus. Can you suggest 2 to 3 stocks you would deem most suitable in these circumstances. Thank you for all your excellent work.