Investment Q&A

Q: Which 3-5 small to midcap US traded companies would you consider the best "Capital Compounders", i.e. with long-term competitive advantages, growing EPS, ROIC and FCF?
Thanks for your invaluable service!

Yvonne

Q: I have long watched CGI Group as an investment based on the advice of Jason Donville on BNN. He was always hyping to ROE being so high and seemed to have good results until he disappeared from the air in the wake of the Valeant and Concordia falls. CGI Group though seems to get lots of "Top Pick" calls on the shows but hasn't really done much. The RSI is down in the 30 range and I'm wondering if company fundamentals combined with the shares being oversold make this a good "trade" or a good opportunity to buy and hold?

Q: Can you please explain the recent downward trend of this stock? Is it just taking a breather or is there something more fundamental.?
Great service ! Thank you !!!!

Q: I realize that AIF stock price has risen about 16% in the last 12 months but since early Jan of this year it’s been on a continuing decline. Can’t find any reason - maybe large shopping malls suddenly out of favour? Or is it sector rotation? What is your thinking on this stock?

Q: Could you give me your view on Victoria Gold. Gold has moved up but this stock is not moving with it.
Thanks John

Q: Preliminary financial results announced today. Any surprises or insights? If others are in the process of asking similar question...don't waste your time on answering my email too.

Cheers, Stephen S

Q: Looking to add two of these names to my TFSA. Which two do you think offers the best growth over a 5-7 year period?
Thanks

Q: Seems like a barrage of questions on Cineplex, in a week, but will ask, anyway. What is its current/ forward PE and is the present valuation justified (even after the steep decline) ? Do you expect Cineplex to continue to generate strong cash flow to pay down its very high debt load ( $600 mln ? ) and support 4.5 - 5% dividend ? How are the results of Cineplex capital investments in new initiatives like Rec rooms and VIP Cinemas ? Cineplex was removed/sold from 5iPortfolios, last year, in what looks like a smart move. But added back to Income portfolio, after some time, at a much lower price ($36.50, I think). With the recent drop in price, do you still have conviction that it's a good income stock to own and would you add ? Also, any change to A- Rating, with all recent developments and outlook ? Thanks

Q: I joined 5i about 2 years ago and I started moving my investments from mutual funds to a mix of the balanced and growth portfolios. I have returns significantly higher than I had before I joined 5i so thank you for the great service.
In non registered accounts I currently have full positions in CAE, CLS, L, MG, NFI, PBH + WSP. In registered accounts I have full positions in GC, KXS, SHOP, PHO, AW.UN, SIS, TD + AEM. I have 1/2 positions in registered accounts in AVO, GUD, SGY, + TV .
Would you recommend adding to any of the 1/2 positions or buying 1/2 or full positions in different names. Risk profile isn't a problem and I have at least a 5 year outlook. Thanks.

Q: Could you comment on todays results? Still a good holding for small cap growth? Is it still expensive? Thanks.

Q: I have room in my RRSP to add one of the above. It's a five to ten year window and I'm looking for both growth and consistent dividends. The sector is irrelevant for this portfolio. Thanks

Q: I'm confused! All of the US Big Banks are way up today, yet ZUB, which I thought followed all large cap US Big Banks is way down? Any idea why this happens?

Q: I have not made use of DRIPS in the past but am considering the conversion for some stocks like banks. I have been appreciative of the extra cash for more buying in the past but locking in the dividends may be a better way to go. Thoughts?

Q: Morning 5i
Which of FDX or UPS is the better company to invest in over the next few years or would a half position in each be the way to go ?
Thanks
Bill C

Q: My question is about Purpose energy credit opportunities income fund PCF.UN, is it converting to a ETF. If it is when? Would this be a suitable buy now before the conversion in a TFSA for a 79 year older would you wait to buy at all.Your opinion of this as a fund and as a ETF would be appreciated. This would be in a managed account with a fee of 1% plus the fund fee.
M

Q: Constellation Software announced this morning of a nice acquisition of Acceo Solutions for a price of $250 mln.
Q1: Seems like a good size acquisition, after some time. With annual proforma revenue of $116 mln, how significant is this transaction ?
Q2 : What is your understanding of the proposed financing ?
" Constellation expects to finance the Acceo acquisition on a stand-alone basis. This is a continuation of Constellation’s use of leveraged capital structures to compete more effectively for larger vertical market software businesses. "
Thanks

Q: Hello Peter. What do you think about the $250M deal that CSU announced this morning, and what do you think it will do for CSU's outlook and share price going forward in the near/mid-term?

Thanks,

Q: As a follow-up to your Jan 12 reply to Elmer: I bought OTEX a couple of years back partly based on a very low PE in the 6-7 range (Thompson-Reuters stock info in National Post). Same source now has PE at 80. Your response says: the stock is cheap at 13X earnings. I'm confused. Could you explain? Should investors ignore the Thomp-Reuters numbers, or how can they be used?
Thnx in advance.

Q: i currently own aqn as well as car. do u think these stocks will be heavily affected by rising rates would you hang on or sell?

Q: Hello 5i team,
S&P Dow Jones Indices and MSCI recently announced revisions to the Global Industry Classification Standard (GICS®) structure for 2018. I think it would make a great topic for a 5i blog. In the meantime, I have a some questions: (1) does this announcement confirms that we should not always follow blindly industrial classification? (2) the classification is not always up to date, especially in developing industries (internet, telecom, media, communication) or when companies are transitioning activities? (3) Investors should allow themselves to split classification 50%/50% for some companies? (4) Could you list some companies that you think are currently "misclassified" by index providers (SHOP communications?) including companies either under coverage or in 5i Research portfolios or that will be reclassified?; (5) Would you agree that this announcement confirms that long term investors should not care that much about short term sector weighting fluctuations (rounding to the closest 5% is good enough) and should focus on selecting the best investments (stocks) whatever the sector, while just avoiding too high sector concentration, instead of doing mandatory diversification among all sectors in less good companies (for exemple recently : energy)? My main point is: many investors will change the composition of their portfolio (trade) following S&P and MSCI decision while their portfolio exposition (economic drivers) will not have change. Reading most 5i Research questions every day, I see many questions about sector allocation. I thought my questions would help some clients. Any other thoughts?
Thank you for your collaboration, Eric