Investment Q&A

Q: I was hoping to get your thoughts on Venator's position on CSU:

http://www.venator.ca/uploads/FEB_2015__Final_.pdf

"I just don't like paying for acquisitions that haven't happened yet, and when you pay more than 20x earnings for an otherwise no growth company that is exactly what you are doing. This is why we own Open Text but not Constellation Software. If Open Text doesn't make an acquisition for the next two years it might drop about 10%, putting its valuation on par with Oracle (to name another low growth consolidator); the same scenario played out with the aforementioned Constellation Software would send that stock down over 30%."

CSU's share and earnings growth is largely based on its excellent ability to acquire businesses and less so on on its organic growth. If CSU is unable to acquire companies at the same pace (the larger it gets, the bigger the acquisition required to make an impact), would this not cause a material negative affect on its valuation?

Q: With the price drop I see the yield is in excess of 8%. Any news that would be of concern here.

Many thanks

Paul

Q: What is your opinion on the IPO of Hydro One closing on November 02-2015 the yield look decent at 4.20%?

Q: What about this new issue of common shares that ENF is doing so quite large at 700 million dollars.

Q: For your readers:

https://www.bloomburton.com/research/CXRX20151012.pdf

Research report dated Oct. 12 from Bloom Burton (investment bank specializing in Healthcare in the US) regarding CXR. Please note that valuation is in USD in the report. A $78USD target price would imply ~$100CAD.

It appears there is a massive disconnect between CXR's current share price and its earning potential. The selling is become almost ridiculous at this point. Thoughts?

Q: Last 5i comment on EMA appears to be almost two years ago. Could I please have your current thoughts on this utility for income and some growth? Thanks.

Q: Just to clarify the tax treatment re: BPY.UN distributions. I have held the TSX listed BPY.UN, BEP.UN and BIP.UN for a long time in a taxable account and there are no US withholding taxes withheld on the distributions. The distribution is taxed differently than a straight dividend (via the T5013) however. If you held the US listed stocks I think there would be a US withholding tax. Hope this helps.

Q: what do you think of aw.un , q3 just released , increase dividend once again 3.4% SSG of 8%,Great stock, look like they are firing on all cylinder.

Q: HI Peter,
I understand that the patient home story was a foolish mistake by the executives, but do you think it deserves a drop from @2 down to 60 cents, especially when the dust has settled? With respect to Nobilus Health, the article from midas letter clearly shows the intent of the Alpha writer but there seems to be no recourse from SEC. In the future, what chance does an average investor have when there are folks trying to manipulate the stock without repercussions. This is not an easy issue, but any comments would be appreciated as it seems the small cap space is just to vulnerable regardless of how well the companies are doing. Also, do you have a link to check shorts on a stock. Lastly, Constellation is on a roll without much news. Any comments. Thanks again.

Q: Could you comment on the Hydro One IPO available now at some brokerages. Do you think the price range is reasonable (very annoying when it is not specified exactly), and do you see any growth in the proposed dividend. Do you think it might be better to just wait and buy on the market, if at all.

Thank-you

Q: The IPO for Hydro One was announced. Any reason not to go for an Indication of Interest to try for some shares? Thanks.

Q: 11:31 AM 10/10/2015
Hi Peter:
The article in the Oct 10, 2015 Globe and Mail suggests that the Hydro One IPO will come out very soon with a suggested price range of $19 to $21 per share and with a suggested yield of 4.2%

How would you value Hydro One when compared to other utilities with comparable yields such as Brookfield Infrastructure [5.36%], Algonquin Power [5.33%], Emera [4.35%], Fortis [3.86%]?

Will Hydro One be burdened with debt and, looking ahead, will it need to raise money for ongoing operations?

Would you be buying Hydro One at it's IPO or would you prefer one or more on the other utilities which have proven operating records and strong growth, most with rising earnings and dividends? Which would you buy for regular income?

Thank you....... Paul K

Q: Could you give your out look on the company's balance sheet (short term/ long term debt and cash) and revenue growth going forward. I am holding this for the upgrade cycle which many analysts think will either start in Q1 or Q2 of 2016 and continue going forward. I see no other alternative if the rail industry still wishes to move crude and dangerous materials through areas of high concern. I see $1.80 as the holding point and if it breaks would you see $1.00? Thank you for your help. Jason

Q: GIL-Quite a lot of insider selling especially by the co's ceo since Sep 1. On Oct 6 BNN reported that as a result of either Trans-Pacific Partnership or IMF downgrade of Canada's growth( to 1% from 1.5%) & global growth,the following 4 stocks are victims:-1)CCL.B(was down to $183.49 & closed @ $169.23 on Oct 9) 2)GIL $38.72 & $39.13 on Oct 9) 3)ITP & 4)DH. Your comments on GIL & CCL.B.Appreciate your usual great services & opinions.Thanks

Q: Noticed a number of articles recently on a suggested threat to traditional banking business from emerging technologies and new 'fintech' startups, including an article in today's online Globe Investor. Any thoughts on this? Do you think the big Canadian banks have the ability to respond to the possible scenario? Thanks.

Q: could you comment on tmc,seems like a gradual decline over time.

Q: Peter; Just a add on to Peters quesrion re SAP and the TPP- the US congress still has to pass it and we all know how well they get along with a looming election. Publish if you wish. Rod

Q: In your response to me you state "Our preference to dividend appreciation stocks is based on fact, however. Stocks that consistently grow dividends have been shown to be far far superior on a risk adjusted basis to any other category of the market." Can you please provide the facts (data) using ETF's to validate your claims. My data shows:
VUN 2 years = 46.6% versus
VGG 2 years = 37.6%
Thanks and I do appreciate your service.
Steve

Q: I have held Brookfield Property in my RRSP since 2013 and have never seen a withholding tax: the Sept.30 distribution was a full 34.9 cents C$ per unit though you may elect to receive this in US$. Since the company is Bermuda domiciled, like BIP, it probably escapes US tax, but if owned in a cash account I'm sure it would attract a T5013 to complicate your life and probably some withholding tax from some tax entity.

Q: Rob today asked for your recommendation on an ETF that tracks the broader US market, that he can buy with CDN funds. Your recommendation was VGG a dividend appreciation etf with 1 year return (as of yesterday) of ~ 18%. You have recommended this etf on various other occasions today and in the past. You should be aware the tempting 18% return is due to currency because the hedged VGH return over the same period is a mere 1.9%. I cannot understand why you continue to pick these "niche " etf's especially when someone asks for a broad index. The broadest US index with lowest mer in US $ is VTI and in Canadian $ VUN. And VUN has 1 year return of 22.6%. VTI/VUN over various cycles outperforms these "niche" etf's tracking some subset of a market and this is what etf's were originally designed to do anyways so just recommend the broadest index to maximize investors returns.
Steve