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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I own MG and MTY in consumer cyclicals and contemplating adding another name among GIL, RCH, ZZZ or CTC.A. Please order them from best to worst as a solid complement to the two I already have, as part of an RRSP account with a 15+ years time frame. Please give a brief rationale and suggest another company if there is an obvious better choice. I note that the stock value of RCH is surprisingly stable on multi-year charts for a c. cyclical.
Read Answer Asked by Christian on September 05, 2017
Q: I'm a retired, income-oriented investor. I own PWF, GWO and IGM in a diversified income portfolio. All three pay decent dividends (IGM highest at 5.5%). PWF owns the other two and has European exposure through Pargesa. GWO is my only CDN Lifeco holding. Is IGM likely to be impacted by new CRM2 rules about fee disclosure? Should I keep all 3 of these? If not, which should go? Your opinions/suggestions are requested.

Thank you,
IslandJohn
Read Answer Asked by John on September 05, 2017
Q: I want to give my take on DFN, a split share investment vehicle. I realize 5i and probably every other good financial advisor does not favor this vehicle and would not buy this for their clients. Yet people are buying this product every day.

Please let me know how sound these thoughts are or if you have anything to add.

As an investment DFN is a road full of potholes. For one thing, the dividend could be cut off completely for as long as two years, although DFN has never discontinued its dividend. Along with that, the share price could plunge 30% or more. As well, the share price will probably degrade over the years.

Who would benefit from DFN? Someone who absolutely needs the 11% dividend every month in order to pay the bills.

However, they need to be cushioned against the potholes. They need a mental cushion that will allow them to withstand sharp drops in the share price, as well as survive a disappearance of the dividend for possibly as long as two years.

Therefore, besides the right mental attitude, they need a cash back-up that would replace an absence of the dividend for two years. On a 100k investment they would need about 20k in cash to replace two years of cancelled dividends.

They also need to realize that at the end of the day, perhaps only half of their original investment may be passed on to heirs.

I can see people in their 70s and 80s who are prepared for the aforementioned potholes buying DFN, so there may be a demographic tailwind holding up DFN for the next several years. Thank you for allowing my view to be heard, and I appreciate your response.

Read Answer Asked by Jerry on September 05, 2017
Q: On RMP specifically, do you have an opinion regarding their announced asset sale?
Of greater interest, what are the mechanics involved when trading resumes after a Halt Trade order? While halted the bid and ask were matched at .445. Shortly after the halt was lifted the bid and asked appeared to be matched at .485 but no trades appeared. A few minutes later, same scenario at .52.

I viewed this on Direct Investing and it appeared that the first trade - after the halt - occurred around 2:10 (and according to RBC site the halt was lifted about an hour prior)
Read Answer Asked by Peter on September 05, 2017
Q: GUD is consistently a top recommendation as a growth stock. Have you spoken with GUD mgmt. lately to be able provide any additional info. as to when/how they are expecting to invest some of their cash and therefore move the stock in the next six months?
Without any news, it seems that GUD will continue to drift down as the 'bored' investors continue to sell.
Read Answer Asked by Curtis on September 05, 2017
Q: Good Morning All,
I have cash from profit-taking in resources and I'm looking at ABT, ITP,SIS,CCL.B, or ZCL. All had some pull-back and pay a decent dividend. Your thoughts please. Many thanks for your excellent service. Bob.
Read Answer Asked by Robert on September 05, 2017
Q: Good morning,

With sells as it was going up, I am still about breakeven on CRH but it has dropped to 1% of my portfolio. I have lost confidence such that I won't put more in. I am, however, looking for additional healthcare exposure. Right now I am also holding JNJ (3%) Danaher (DHR, 4%) which is mostly medical/dental since the spin-off of Fortive. I have been thinking of exiting JNJ due to the price that they paid for their latest acquisition. It seems a little inconsistent with their historically very conservative nature.

Would you think that adding a 2.5-3% SIS or GUD is a better approach, or should I keep CRH given its longer term potential? I prefer to not watch my investments every day and have a diversified portfolio across market cap and Canada/US with a lot of multinational companies (like CCL in Canada and UL in the US, for instance).

Do you have any perspective on the JNJ acquisition? If so, please feel free to deduct two questions.

Thanks!

Derek
Read Answer Asked by Derek on September 05, 2017
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