Investment Q&A

Q: On the oil getting whacked theme, have you guys looked a PRE today? Down to $8.20. They are forecasting the following:
A base case average WTI oil price assumption of $70.00/bbl during the year and the 2014 average Brent-WTI benchmark price differential.
Oil price realization is expected to average to approximately the WTI benchmark price assumption.
EBITDA of $1.9 to 2.1 billion and Funds Flow (Cash Flow) of $1.45 to $1.55 billion.

So the company is currently trading at just over 1X EBITDA and 1.5X Cash Flow. They do have debt on the balance sheet but at low rates strategically and are long term. Unless oil stays well below $70 for a very long time valuations like this seem crazy. What am I missing?

Q: Hi again team, Would you pls. comment on their financial results....anything to worry about? It's down almost 3%.

Thank you.

Q: Hi Peter & 5i Research Team,

This might be of interest to other members also. I just happened to log into my TD Waterhouse account at 11.30 pm on Dec 4 and was surprised to see that my stop loss and buy orders for Amaya were "pending cancellation" and no longer active. I immediately telephoned TDW and was initially told that I must have cancelled them myself! When I said I did not, they put me on hold and then came back to inform me that TDW cancelled these orders because Amaya Gaming has changed its name to Amaya Inc. On my request they then reinstated the orders over the telephone. They also said that if I had not called them these cancelled orders would not have automatically been reinstated! Do you know if other brokers do the same? Because if I had not noticed this by chance I could potentially have lost out monetarily when the markets opened tomorrow.

Q: Despite all the negatives about this company and lack of confidence even by the directors (based on their sales of stock), I see the CEO has been continuously purchasing shares from February to the present. He had about 100,000 and now has about 450,000 (direct and indirect). Is he an idiot or should I be following his lead? As always, I very much appreciate your opinion

Q: Hi Guys

I think you might have made an Error on the Income Portfolio regarding the return on Silver Wheaton.The Nov return % should be negative not positive.

Thanks Gord

Q: This one has me puzzled quite a bit.
I am thinking of buying another 2000 shares or so, My weighting would still be less than 3%. Having trouble understanding that Bloomberg reported that QKR could be making a bid for this company at around $1.0 billion. This would value the stock at about $5.00 per share. Good earnings, a fairly high dividend, very low copper cost producer. Do you think the price is falling on this stock because of Lower China growth, thus much lower copper prices(copper prices falling every day), or that the takeover rumor has no merit and it is just that, a rumor. I guess I was putting to much faith into the story. One would have thought that the source was fairly reputable (Bloomberg) Comments please on the rumor

Q: Do you see any appreciable difference between the 1-5 yr corporate bond ladder etfs issued by i-Shares (CBO) and by RBC (RBO)? Of the two, RBO seems to be closer to a truer ladder as CBO has 36% of its bonds with >5yr lifetimes. On the other hand, CBO is far more liquid and its credit quality seems higher (RBO has 22% BBB whereas CBO has 0%). On the plus side, RBO showed less price decline in the past year compared to CBO. I would appreciate your comment.

Q: Hi 5i team,
I have a core position in ZWB for extra yield exposure to the banks which has performed very well this past year. I have more cash to deploy for yield / "lower" risk and was thinking of starting a new position in either ZEB, adding more to my ZWB holdings or ideally, . starting a new covered ETF that tracks US banks if there is one you are aware of. I look forward to and appreciate your thoughts.

Thanks in advance. Your perspectivce is always helpful / insightful.

Q: Can you please speak to CDZ's interest rate sensitivity given it is a cdn. dividend-grower ETF. So, if we do see gradual interest rate increases in 2015/16 and beyond, what are some possible outcomes/scenarios for CDZ in your opinion. Thanks.

Q: Peter and Team,

Just a follow up on the question asked by another member just a bit earlier. You suggested CBO as a good ETF for corporate bonds.

Here are my questions:
1. If you buy a bond ETF, does the ETF price go down if interest rates go up or is it unaffected because the ETF manager will hold the bonds to maturity any way and get paid par?
2. Will this offer protection against rising rates (and maybe inflation?) due to the 1-year out maturities getting rolled into new 5-year maturities ever year?
3. Is this a better choice than owning a few bond positions outright along with a stock portfolio (assume diversification)?

Just as a comment, in my ideal world, I want to buy bonds that pay me back my money at maturity and give me yield along the way. I want to preserve capital with these choices and am not trying to hit a "home run."

Thanks!

Q: Hello, I originally bought ACQ at 81 dollars. It was 2 percent of my portfolio. It fell to 48 dollars today which is about 1 percent of my portfolio so I just bought enough to bring it back up to two percent. Was this a mistake? Why had it fallen do much? I thought low gas prices usually equated to an increase in car sales?

Thanks,

Carla

Q: I would appreciate your assessment of the announcement this morning by Kelso Technologies as follows...
Association of American Railroad has approved our new JS165H high-flow pressure relief valve for commercial applications after completing its required two year field trial. The JS165H has been designed for use on general service rail tank cars carrying hazardous and non-hazardous non-flammable chemicals that require a pressure specification of 165PSI. Rail tank cars requiring this technology are primarily DOT-111 tank cars that represent approximately two-thirds of the total DOT-111 fleet in North America.
North American chemical companies have been very supportive of the development of the JS165H as a best available technology and we are now able to supply their needs. Management believes that this development will allow Kelso to increase its market share and continue the momentum of its annual revenue growth.
With this AAR approval Kelso is now able to supply approximately 70% of all PRV applications required by the AAR. The JS165H is well suited for new tank car manufacturers, retrofit operations and repair facilities. The Company is able to produce this product in its current production facilities in Bonham, Texas.

Q: How important is the acquisition of Studon to sox, can they really afford it, and will this make them a great company. Is this a great company to invest in for a 3-5 year period or are their better choices at this time? I already own a lot of energy and gold companies. Thank you for your help. Always really appreciated.

Q: Hi, you had mentioned that you trusted that GUD would put their recent financing funds to good use. Looking at the micro-cap LAB which is in a similar area and also recently did a financing, do you have any idea what their gameplan might be for the funds from THEIR financing? Do you feel it is just a promotional move, or a positive move for the company?

Q: Hi,

I bought this a couple weeks ago thinking it was over sold. Was I wrong! I'm down 25% in a couple weeks and it keeps dropping. I read of fears with the dividend and price target cuts to $74! What do you make of this? I'm happy to hold for a long time but worry that, like ACQ and AVO, logic has nothing todo with it. Should I sell?

Q: I have been watching two stocks this year that have fallen off a cliff. Canexus (cus) and Horizon North (hnl). Both of these stocks are down more than 60% this year. Are these dead companies or are either of them 2015 comeback candidates?

Q: Enbridge is up substantially today (Great!), but I'm not sure why transferring $17b to anther company creates so much value?

Poor old BDI, what did they do to deserve this drubbing?

Your thoughts as always, are greatly appreciated.
Mike

Q: Do you have any thoughts on the recent acquisition. Thanks.

Q: tax loss selling question.

TAX LOSS QUESTION ; can I claim a loss by selling for example COS in my personal account and have my wife buy it back in her personal account in less that 30 days ?

can I claim a loss by selling for example COS in my personal account and buying it back in my CORPORATE / BUSINESS ACCOUNT in less than 30 days ?

Ernie

Q: I am looking at some of the oil stocks and see SGY and PD for example are trading at or below book and with a P/CF of less than 5 (based on stats from TD's web broker). Both pay dividends, though these may yet get cut a bit. Sure there is likely to be volatility for a while, but if not these, what metrics would you use to say it is time to start overweighting some of the sector?

Love your service!