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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: Could you comment on the Killam proposal to convert from corp to REIT. What are the pros and cons to a shareholder, and in general, do you see this as a positive move?

Thank-you
Read Answer Asked by grant on October 09, 2015
Q: Hello Peter,
Regards your response to a question today, swould the increase in credit spreads on its debt affect its ability to raise the $950 million, or make the terms for the debt unfavorable for the company thereby impacting the bottomline for the next 6to 8 quarters? Has the risk increased and the probability of a bounce reduced thereby making the current price appropriate rather than attractive?
Regards
Rajiv
Read Answer Asked by Rajiv on October 09, 2015
Q: Hi Peter, I have to confess that I became too greedy today and bought 5% of my portfolio at 45.20. In retrospect now I am thinking I took probably too much risk. I started buying CXR at CAD 86 and then bought some at CAD 65 and again some at CAD 50 and today CAD 45.20. Now it is 15% of my taxable account portfolio. My average cost is now at around CAD 55. Should I see some position?

I read TD Securities report and they have a Price Target at CAD $105. I read RBC report too and they have USD $86 target price(in their worst model it is USD $30). Also read Jason Donneville letter. Anyways reading at the reports and looking at your responses since 2014 for this company it seems to me it is significantly undervalued. As say 4.6X 2017 earnings(that is a PE a Bank deserves during a financial meltdown). So I am not sure what I am missing here. I know they have high debt load, but looking at their current debt to equity ratio(I got it from TD, can you please confirm from Bloomberg? Also I believe this is pre-amdipharm number), it is lower than Valeant. Anyways, considering healthcare earnings estimates are usually accurate(i meant not in vagary of economic downturn), what is the major problem here(that retail investor like me don't know)? Can you please jot down the risks? Also is there any possibility that they could not acquire amdipharm? Can you tell me from Bloomberg if any institutional selling recently? Can you elaborate on that? Also being a very popular stock why don't you guys please start coverage on it? Also what is your earnings target for this in 2017?
Read Answer Asked by Sridip on October 09, 2015
Q: I sold Wajax & Transalta. Can you please advise your best picks for replacements for these. Combination of dividend and growth is nice but primarily which have the most future upside in a recovery?
Read Answer Asked by Alan on October 09, 2015
Q: Hi Peter, Can you please comment on the safety of GICs in Achieva Financial Credit Union in Manitoba? The website says its deposits are protected by Manitoba credit union deposit protection. How does that compare with CDIC deposit protection? My accountant swears by it and has money in it.
Read Answer Asked by sarah on October 09, 2015
Q: This stock appears very volatile for a consumer staples. what are your views on short and long term outlook for this company?

I have small position at about $52. Is it sell, hold or add more at current levels?
thanks
Read Answer Asked by satish on October 09, 2015
Q: I just wanted to follow up because I was specifically referring to Andrew Peller. I got this from the AIF: " In the event a takeover bid is made for Class B Shares, the holders of Class A Shares have no right to participate on such takeover bid."

Doesn't that mean the company could be taken over without an offer for the Class A shares?

Thanks!
Read Answer Asked by Wayne on October 08, 2015
Q: Hi 5i,

I often hear that the company is possible take over target. If that is the case, wouldn't it be better to be a holder of the "B" shares. "A" shares could be left with no offer. Am I missing something here?

Read Answer Asked by Wayne on October 08, 2015
Q: What do you think of MTY's earnings that came out today? Is the stock a buy, hold or sell at this time?

Best,

Carla
Read Answer Asked by Carla on October 08, 2015
Q: Jason Donville just released his Q3 newsletter:

http://www.donvillekent.com/pdf/DKAM-Newsletter-October2015.pdf

It's always a great read, but I thought your readers may be interested in what he has to say regarding CXR. Please note this is the last paragraph of a lengthy discussion in the newsletter:

"So, where to from here? CXR has completed its equity issue and its underlying businesses are strong. But we also know the company is carrying more debt than we would like. Going forward, we think the stock is still quite undervalued but the company will need to address its debt issue somewhere down the road. This could mean that the company raises more equity or puts itself up for sale. Regardless, at current valuations, I think the company is worth a lot more than $50 a share. On our numbers, CXR trades on 4.8x 2016 Cash Earnings and 1.1x BVPS, while earning a 24% ROE."
Read Answer Asked by Arneh on October 08, 2015
Q: Mitel is up today, ostensibly on news that Eliott Management Corp has initiated a significant investment in MNW and combined with their holding in another similar company is urging the board, I think, to consider merging the two. (please correct me if I am wrong). This type of shareholder agitation is not new but I am wondering what to make of it. While not all cases will be the same, in general it seems to me that these types of action - whether it be calls for mergers, asset sell-offs, special dividends etc. are essentially a condemnation of current management since if these ideas are so good the management should have thought of them.

The market seems to like this latest move as the stock is way up but if it is such a good thing, why didn't the current management initiate it? Should we continue to have confidence in the current management or is someone like Elliott, who seem to have a good reputation, just a smart group that thought of something no one else did?

Your insight is greatly appreciated.

Paul F.
Read Answer Asked by Paul on October 08, 2015
Q: Would you speculate as to what small and med. oil company maybe available for M+A. Thanks Jim
Read Answer Asked by jim on October 08, 2015
Q: Hi Guys,

I have a large loss with a Fairfax Financial preferred (FFH.PR.I).

I was thinking of selling it and then purchasing FFH.PR.G. I would be in almost the same position as if I kept the original preferred but I would have a large tax loss to use. I would lose 29 basis points on the new rate and the reset would be a couple of months earlier but I would gain on the selling of FFH.PR.I ($15 bid) and purchase of FFH.PR.G ($13.70 ask).

Your comments would be most appreciated on this move.

Regards
John
Read Answer Asked by John on October 08, 2015
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