Investment Q&A

Q: Hi there 5I. I am looking at adding Cons cyclical/discretionary to my taxable portfolio and currently hold PLC(1.2%); WMT(3.1%) and PBH(2.1%). I am weighing the option of doubling down on WMT, or add CVS and/or BIG. Is there a preference in your professional opinion and/or are there considerations that I should consider for the upcoming holiday(thanksgiving, amazon prime days, xmas) seasons to the new year

Thank you

Q: Hi, I have these 3 companies in my new TFSA acct. at about 1.5-2% each. ( I have quite a bit of room to add ).
I like each one and will be adding to each, but would also like to add two or three more for better sector diversity, any suggestions? I do like dividends but not necessary.
Thanks for your input.

Q: Hello 5i,
I sold PLC at a gain to buy AW due to the higher dividend and good pricing. I sold ET and bought TCL.A also at a good price now.

With the excess cash from the sale of ET should I wait to see what you suggest next or buy CU which s not in your portfolios but has a good dividend, is at a good price and is suggested by you in many instances or buy GOEASY also at a good price, growing, and a reasonable dividend? I am 73 looking for dividend and some growth with a ten year outlook. I do not need the funds as a defined pension plus dividends. If you have better suggestions I would appreciate them.
Stanley

Q: Retired dividend-income investor. Looking to add to my Consumer sector. I already own PBH, NWC, PLC. I am looking to add one more name, preferably with a dividend > 3%, although dividend security and dividend growth are more important than todays yield.

I have looked at CTC.A, LNF, MG, PRMW and QSR. I have researched each using both fundamentals (beta, P/E, P/BV, P/CF, P/S, ROE) and technicals (higher highs and higher lows, above 200mda), as well as current analyst estimates.

CTC.A comes across as just "ok". LNF has already had an incredible jump recently, so I am hesitant to buy at current prices. MG is not bad, but shows a ROE = -1%. PRMW looks good except for the ROE = -9%. QSR also looks good, showing a ROE = +29% (I can't find P/BV and P/CF anywhere). The bottom line is there doesn't appear to be a stand out obvious buy. I am leaning toward one of MG, PRMW or QSR.

Would you please rank all 5 companies from best to worst for the following (assuming a 3-5 year hold):
a) Dividend security
b) Capital gain potential
c) Total return potential

Thanks for your help. Much appreciated....Steve

Q: Comments and thoughts on the quarter? Thanks

Q: I bought shares in this company many years ago in my registered account primarily for income. Would you recommend that I continue to hold them? If not what would you replace it with assuming I want to have a company that provides a dividend yield of at least 3% ?

Q: In the aging demographics trade, which of the three companies would you buy right now and which would you sell?

What are the valuation and growth projections for PLC and SIS?

Q: I have about a 1% weighting in each of the following names in my portfolio: MX, PLC, BYD, MTY, ALA, NFI, TFII, GIB.A, MFC, SIS.
I want to refocus by eliminating 3 or 4 of these. Sector allocation is not a factor. Please suggest 3-4 names to eliminate (list the most obvious to eliminate first) and 2-3 good candidates to boost today (best first).

Q: Retired, dividend-income investor. Looking to top up my Consumer sector holdings. Currently have PBH, NWC and PLC, which are more on the Staples side of things. I have a "full" weighting on each, relative to my assessment of their risk. Considering getting back into the Discretionary side...maybe rebuy LNF or MG. Could you run a screen of Canadian Discretionary stocks that pay > 3% dividend and overlay that with your ranking from best to worst...maybe the top 5 for me to consider.

Thanks for your help...Steve

Q: Hi
I hold stocks of Starbucks, Parkland, Parklawn, TC Energy.
I would like to get your outlook on these companies going forward in this volatile market. Do you see them as having good fundamentals and re-bounding back in 2021?
With the US election taking place in Nov 2020 and if Biden is elected, how will this affect overall market and will we see the stock market on the downside again?

Thanks
Kristelle

Q: Good morning,
I own a small house in Ottawa that is free and clear with a current market value of approximately $350,000.
A recent discussion with my trusted mortgage broker confirmed that a 5 year term (Closed & Fixed) term mortgage can be obtained at a rate of 2.29%. This mortgage is said to be:
a. insured through CMHC,
b. portable, and
c. transferable.
At that rate of 2.29% and given that the interest paid would be tax deductible if I use the funds for investment purposes, I'm seriously considering borrowing around $200,000 and investing this amount for an initial 5 year period with an expected net rate of return on investment of 4.5% .
Q1. With $200,000, what are your thoughts of splitting this amount in 5 different chunks of $40K in the following instruments:
a. Mawer Tax Effective Balanced Fund,
b. Mawer Global Balanced ETF Fund,
c. Vanguard Balanced ETF Portfolio,
d. IShares Core Balanced ETF Portfolio, and
e. BMO Balanced ETF

Q2. As an alternative to the above and given the 5 year time frame, would your preference be to invest the $200,000 in a selection of best in class individual stocks split between different sectors and if so, would you be so kind as to provide me with ya listing of your best ideas at this time.

I thank you and look forward to hearing your thoughts on both of these investment strategies.
Francesco

Q: Bought Absolute Software and Park Lawn in March, up 42% and 26% respectively. Both about 1.5% of overall portfolio. Any reason to take profits now or just let them ride?

Q: Good morning guys. Looking for your thoughts on earnings report today. Looks like a beat all around. Have been a little frustrated with stock price not participating in most recent rally. Also concerned about effect of physical distancing on funeral revenue. Thinking about stepping out of the stock for bit and maybe revisiting it again post Covid. Always appreciate your insight. Thanks. Chris

Q: Retired and income seeking investor. These three stocks seem to have been underperforming. Would you buy them for relatively low volatility and reasonably good yields? How safe are their dividends?

Q: Given the number of deaths sadly happening in Canada due to Covid19, one would have thought that a company like PLC would have done better in times like this. Can you shed some light on this for us?
Thanks...as always.
Joanne

Q: Good Morning
I currently have 37 positions spread over 3 accounts(RRSP,TFSA,INVEST). Most if not all are or at one time been in 5i’s model portfolios. Many of these are currently at 1.5% or less and although I believe they all have varying levels of potential their current weighting in my overall portfolio will have little impact unless they all go up. I believe I should consolidate the listed group, do you agree and if so which ones would you keep? Proceeds would be added to the remaining names.
Thank you for your continued advice and guidance.
As a side note you advice regarding non action in turbulent times is proof positive. Aside from harvesting some tax losses and buying proxies for a handful of names, my portfolio is now bordering on even for the year.
Publish if you wish

Q: Hi Peter: When I sit back and take a look at the big picture and review how my portfolio performed during COVID-19 (so far), I try to see what lessons I can learn, then turn to how to apply those lessons to make my portfolio stronger.

I am a retired, dividend-income investor. I am a huge believer in asset allocation and have designed a portfolio, in my opinion, to be reasonably well diversified, although heavy to Canada. It WAS roughly 70% equities (including 32% foreign content) and 30% fixed income (roughly 15% insured annuities, 15% Fisgard Capital...both averaging in the 5-6% pre-tax range and minor cash). My equities are mostly blue chip, dividend payers, as you can see above. The 3 mutual funds are a very minor part of my portfolio, especially Eric's Energy Fund (<2%). I also receive a company pension and CPP-OAS which, when included, drops my equities to roughly 32%.

I use various metrics to monitor my portfolio, such as P/E, P/BV, P/CF, P/S, Beta, ROE, Div growth, Payout%, technical indicators like 200 mda. I am normally a buy-and-hold investor who trims/adds around a core position.

Periodically I measure how "at risk" my portfolio is relative to the overall market. I do this by prorating my portfolio using Beta. Based on equities only, I averaged 0.68 and for my entire portfolio I averaged 0.44. So, one would think that if the overall market (TSX) was to drop 30%, then I would have thought my portfolio would drop 44% to 68% of that, being in the range of 13% (overall) to 20% (equities only).

In actual fact, my entire portfolio dropped 27% from peak to trough vs the expected 13%...over double! I understand that EVERYTHING was sold off...almost no exceptions. So what do we learn from this and what changes should we consider? Do we accept that "sxxt happens" once in a while...you can't predict every event, accept it and move on? Should we consider increasing the cash component as a buffer? Or...is there something else to be learned here?

Thanks for you help...much appreciated...Steve

Q: Hello 5i team,
I greatly enjoyed your report on Covid 19 and investment themes. I have a pretty good idea as to 10 to 20 names of stocks that could fit into those themes.
Could you name just 10; I'd be curious to see how close I am.
Thanks,
Antoine

Q: Hi, do you have an updated opinion on KR? I'm trying to round out a top 5 list (US or CAN, doesn't matter) for Consumer Staples. The other 4 are above.
Anything obvious missing? that you would pick over the above 5?

Q: Your views about the company at this price. Will its debt be a problem in coming months as it grows by acquisitions and its acquisition in USA?
I do not hold any position but thinking of adding it. I hold 60% portfolio in Financial (banks and insurance and railroads)
Thanks