Investment Q&A

Q: In response to another subscriber's question you said you "...would be more comfortable with Nestle. It trades at 19X earnings, with a 3.4% dividend. Debt is high, but so is free cash flow. Solid earnings growth is also expected from the company. It does not have a great record of beating earnings estimates, but overall we think it would also be fine as a consumer sector investment."

Nestle trades as NSRGY on the pink sheets. What would be the tax treatment if I bought and held this in my RRIF account? My understanding is that Swiss withholding taxes would be deducted at source and the after tax yield would be much less than 3.4%.

Q: I have owned AYA for almost 3 years and have sold when when my weighting was more than 7%, so I am just holding my profits now. I think when the stock was trading higher than $35, 5i was recommending the stock. As far as I can tell the fundamentals have not changed and that is why I am still holding some AYA stock. I can understand that external events may have turned some shareholders off and therefore the shares are trading at $19. On a stock like AYA, is it the momentum or in this case the lack of it that drives the price? If the potential was there when the stock was $38, is the potential not there anymore? I have my doubts that the privatization bid will succeed; but in the next two+ years is there not good growth expected?

I think 5i is the best!

Q: Magna pays their dividends in USD. On their website they indicate that their dividends are "eligible" thus eligible for DTC. How does one be as tax-efficient as possible, not pay brokerage a conversion fee for USD to CAD conversion, and apply DTC? Cannot apply DTC if held in TFSA or RSP.

Q: Hi Peter and gang,

Would you please comment on the gradual pull back in the stock price of these two companies over the last 6 months. Thanks.

Q: Are dividends on Bond ETFs taxable as interest? If so, they would not qualify for the dividend tax credit. Would it be wiser to look for dividend bearing shares such as BCE with a low beta and a good dividend that would qualify for the dividend tax credit?

Q: NYX Gaming continues to trade lower each day and yet there seem to be a number of positives on this company. First of all is there a short position on this company or is this decline due more to tax loss selling. Secondly TDWaterhouse shows a debt to capital ratio of 52%. Should I as a shareholder be concerned about this especially since I am considering buying more. TD also shows the cash flow as $0.31 and the price/cash flow as 5.4. Do you consider these adequate numbers to offset the debt load. Thirdly are these figures from TD reasonably accurate and if not could you please advise. Thanks as always for the excellent service that you provide.

Q: Most recent quarter was very positive, and the stock price is a disaster with no clear bottom. They have huge monthly payments ahead; will they be able to pay them? Is it time to get out fast?

John

Q: Him Peter what's pushing eif to these levels .
30% in the last month .
What do you think of exiting I bought for stable income but having second thoughts
Kind regards
Stan

Q: Hi did I miss news on the auto sector? These stocks are up a lot suddenly. We're they just oversold or is there some data regarding "peak auto"? If so, then this strength could spread to XTC and PIH?

Q: Hello Peter,
Your thoughts on PLI here at this recent swoon. Is this tax loss selling or Pli seasonality.

I have been averaging down positions from 2.80.

The street loves this stock, INK insider report has Company director buying millions in stock on open market at 2.40 Nov 30. I am at a loss with this drop. My Alaris AD has saved my portfolio while I wait for this spec stock to run. Should just get out now before this gets worse. Broke support at 2.26 and bouncing on new ST support at 2.05.
Thank you again Cameron and Cheers from New Delhi IN. It's warm here and no snow

Q: Hi Peter and team
When making a diversification spreadsheet of my portfolio, how can I properly allocate my stocks in to the different groups like tech, telecom, energy etc?
Is there a place where I can find out.
Thanks
Margita

Q: How do capital gains work with US stocks? In addition to the gain, do you have to factor in the exchange differential rate from purchase to sale. If the US dollar increased in value during this period, does that increase the gain to be declared and the other way around? Thank you for the great service.

Q: Any thoughts on why CIX has risen so sharply in Nov?

Q: Good morning. To what do you attribute the recent run for DH?
Is it likely to continue? Seems counter-intuitive especially during a time you might expect to see tax loss selling.

Q: After the stock price of DH rose significantly and then dropped back today, trading has been halted, presumably because of the company's news release that, "a process has been established by its Board of Directors, including the formation of a Special Committee of independent Directors, to address expressions of interest from certain third parties to acquire DH. No formal offers have been received and there can be no assurances that any transaction will result from this process."

Once the situation is clarified please comment on the implications for holders of this stock. Thank you.

Q: Just to let you know, I tried to log on using Lana's link and I was told at 1:04 Toronto time that the session is full contact administrator.

Hope you will make recording available to those not able to enter the session

Sheldon

Q: In a reply today, you suggested a swap of SJ for MX for quality. In the past five years, MX is up 182% and SJ is double at 363%. Am I missing something here?. You recently added MX to your Balanced Equity portfolio and I would like to follow it but lack the cash right now. SJ is certainly "correcting" but is still in your portfolio. Are you expecting softer returns going forward?

Q: I recently received Coty shares for my PG shares and since it will take time for Coty to bring benefits of merger with PG brands I am lookiung at switching 50% of my Coty shares for Nestle or UL. The funds are help in a RIF and my time line is two years. Please advise.
Hamish

Q: Since your last question and answer on MEG, he stock has dropped from $20 to $7.75 just as you predicted - GREAT CALL. The stock seems to have bottomed out and appears to be showing signs of life. The stock has increased in price by 15% in December so far. Do you think taking a position is still too risky?

Thank you for your advice.

Don

Q: There seems a fanatical feeling that Reits and Utlities will be impacted by a higher interest rate moves by USA.How does that affect Canadian companies if Canada doesn't follow suit or by very little interest moves.Which Reits do you feel won;t be impacted ?