Investment Q&A

Q: Hi Peter & team,
Just want your thoughts on Raging River Exploration (RXX) At the moment. Do you feel as if this is a good entry point after the recent pullback or is it worth waiting to see how it will play out in the coming days.

Thanks

Q: Hi 5i: Exchange Income Corp (EIF) – It is difficult for investors to size up these negative/”short’s” reports. Many people will remember Muddy Waters’ report on Sino Forest and the subsequent disintegration of that company.

About 2 years ago Prescience Group issued a report on Student Transportation (STB), claiming that the company was effectively a Ponzi scheme, that the dividend was unsustainable, and that the intrinsic value of the stock was about $2 per share. STB dropped from 7.38 to $5.71 (intraday levels) in a little more than a week, largely on the strength of the report. Since then $5.71 has become the 2.5-year low for STB, which has made its “unsustainable dividend” payments, without reduction or interruption, for 24 consecutive months. STB shares have spent most of the past year on an upward trend between $6 and $7, although they have popped above the $7 level on a couple of occasions. The dividend yield with STB at $7 is still nearly 8%. Not bad for a stock that was supposedly worth a toonie a share!

So back to EIF, here we go again. What are we to make of Veritas Research’s disembowelling of EIF? Does this put the company’s recent management “expansion” and reshuffling in a different light? Would you be significantly concerned about EIF’s convertible debentures (especially the G series, which you seemed positive on in a previous comment)? Thanks!

Q: This may very well be outside you area of focus, however thought I would still ask as I respect your opinion on equities.

Contra the Heard was on BNN yesterday with three very small US bank recommendations and a previous small bank recommendation. I am starting my due diligence and chart work. Any thoughts you may or may not have would be appreciated.

The stocks in question are FUNC, MCBC, CACB, BUSE.

thanks in advance, Mike

Q: re: diversification, O& G and trending in general

I have consistently heard you loud and clear over and over again your sound advice to focus on long term rather than short term "market predicting" for lack of a better phrase.

Having said that there are at times when certain world wide situations effect a sector - such has the lessening of conflicts in the Ukraine & the middle east resulting in oil prices coming back down to earth.

The "majority" of recent commentary on BNN has suggested we may see a slight correction over the next few months - especially in O&G - after a very strong move. As such I have taken a small portion off the table from my O&G holdings and am now sitting on some cash.

What would you suggest would be a good sector to look at today and what names might you suggest in that sector that have good value based on their EBITDA and affordability with minimal debt?

OR... would you suggest sitting on 5% cash?

Thanks for all you do for all of us

Gord

Q: I’ve been wondering if I should make some amendments to some of our investments in the financial sector which amounts to 20.75% across four registered portfolios for me and my wife. We are both close to 70 and need a little income from our investments. Dividend payouts are barely keeping up with withdrawals from the RRIFs.

We own stocks in four major Canadian banks:
Toronto Dominion TD – 3.43%
Scotiabank BNS – 3.43%
Bank of Montreal BMO - 2.87%
CIBC CM – 3.51%

We also own:
Power Financial PWF - 2.42%
Sun Life SLF - 2.87%

And
Ship Finance SFL (US) - 2.22%

The four banks were bought at different times and have all done quite well overall, some seeming to move ahead while others were lagging and then the picture changing and the positions being reversed. I know you like BNS, but I was wondering if it is a good thing to spread the investment over four institutions for diversification.
Same question for the insurance companies. This time around, I bought them both at the same time, but Sun Life has done better than Power Financial.
Ship Finance is a recent purchase and too soon to comment on.
In separate correspondence after my initial message didn’t get through, I note you answered my question that that you think the financial sector should be 15% – 20% of a portfolio.

Thanks for your advice.
John M

Q: Could you comment please on Questor QST-V. Saw an interview on BNN about this Canadian companies technology to reduce emissions from oilfield flares. Their patent runs through to 2019. Who might be their competition. Thank you.

Q: I am looking for info on WSP GLOBAL concerning the payout ratio and the amount of debt they carry at this time.Thank you for your help.

Q: Exchange Income. New comments?

Q: Good morning Peter and Team,

I am holding some cash in my son's RESP and given the sell off today, I thought this might be a good buying opportunity. I have 3 years before I will need to start accessing the funds. The account current holds: DHX,WSP and BXE. My questions to you are - would you buy today or wait a little longer to see how deep this pull off will be and what stocks or sectors would you reccomend. I was looking at CGX, Teck and Surge energy but I am open to other suggestins. I also like bank stocks but they seem expensive.
Thank you for your comments.
maggie

Q: Aston Hill? It truly baffles me why AHF trades down on a positive press release about AUM. Does this company hit a wall of selling because it issues stock to make acquisitions. It acts like no other stock I have owned and despite apparent good news it has not shown any stength for a very long time. What am I missing?

Q: Aston Hill AHF reported their 2nd Quarter AUM numbers yesterday.Could you add any color on this release?

Q: exchange income fund eif down about 15% 2 days is there a spot you might consider entering

Q: I recently sold some Amaya (AYA) for diversification, and bought AutoCanada (ACQ), and was told this was a correct move. The problem is that AYA kept moving up, and ACQ down. So this clearly amounts to a move too soon. How long do you estimate ACQ is likely to trend down or stagnate ?

Q: Peter and staff
Could I please have you opinion on Air Canada (ac.b) and Cargo jet (CJT).
Cal

Q: EIF - should I add to my position, on the current weakness? Why is the stock falling so hard in the last sessions?

Q: Orange SA (ORAN US) could you please comment on this Telecom?

Q: Good morning, I would like your opinion on Sphere 3D and EXO U. They often are compared to one another on Bay Street. Sphere has had an unbelievable 12 month return but cynics believe ANY has not much and its a stock promote given management has done this before with BioSign and also promoted Orbite. On the other hand EXO which has had a nice move post announcing their new Board of Advisors and is run by the Montreal Hypertech family which is a very well respected billion $ private company. Please let me know your thoughts on both companies. Thank you

Q: Hi
Norbord is not behaving well. Is it still a good hold ?
Thanks

Q: CQE.Its price has dropped fr.$3.04 on 6/12.On 7/7 announced the completion of sale of its non-operated asset @ Ansell & proceeds of some $141m will be utilized to develop its Montney asset. Your expert view as well as whether it is buyable now.What is CPP's ownership now?Thanks a lot

Q: What is your opinion on Aecon Group (ARE) and would you buy at today's level for a long term hold?