Investment Q&A

Q: JPM has had a decent run but I'm thinking of swapping it for Mastercard. Can I get your thoughts please?

Palo Alto has also been terrific, but I'm trying to add more AI into my portfolio. I'd like to sell it and find a new name, CDN or US. I own MSFT, AAPL, Salesforce, GOOG, Meta, NVDA, Constellation, Shopify and Kinaxis. I was thinking of Taiwan Semi, AMD or Broadcom, but can I get your thoughts please?

Q: Portfolio Analytics indicates that, across all accounts, we are significantly underweight in the Basic Materials sector. The stocks and ETF noted above are the only holdings in this sector. (CGL.C is quite a small holding.)

Please suggest at least five additional Canadian stocks in this sector to improve diversification, include a reasonable entry point, and rank them in order of what to purchase first.

Thanks

Q: What AI stock (s) would you consider investing in at this time Which one would be your number 1 pick ?.

Q: What is your view on ACLS. Stock really lagged the sector in 2023. Do you see any catalyst near term?

Q: Hello Peter and 5i team,
My TFSA contains the aforementioned stocks in roughly even percentages except for nominal investments in Park Lawn and DRX. I would like to make my annual contribution to one or some of these companies and would like to know what your order of preference would be for buys/adds at this time. Please also include Celestica in your considerations.
Also, are there any companies in this list that you would consider undervalued at this time?
Thank you.

Q: In some answers, you have referred to some lending companies being exposed to a "rate risk". I am not clear what that is / when it will impact a lending company. More specific to GSY....is it exposed to a rate risk? How will anticipated falling rates affect it? I know that new highs ( or at lest here a recent one) do not concern you but given its run up in recent months, are its valuation metrics still looking favourable?
Thanks for your excellent service.

Q: Can you provide your latest opinion on this company as well as analysis of their balance sheet. debt, cash flow, pe, expected growth,risks etc?
Technically it is breaking out.
Looking at taking a small position in a TFSA .

Thanks very much

Q: Can you give me your analysis on CNO and PESO and what do you think of their future viability? Thanks.

Q: May I have your thoughts on GOT.V latest discovery? If I understand the press release correctly they have discovered additional mineralization where glaciers have retreated. They appear to be “grab samples” so they haven’t done any drilling to get any idea how deep is the mineralization. Risks are still high! Have insiders maintained or increased their positions since my January 2023 question? I note the stock is slightly higher than a year ago, probably mostly due to weaker interest rates! Any thoughts you have would be appreciated.
Regards,
Jim

Q: Could you give your overall current opinion of Darden. Is the debt situation improving?
Thank you.

Q: Could you expand on this please? "I like EIF and hold it in greater amounts in my non registered account where I intend to keep it but expect it will be dead money for at least 6 months while Northern Mat recovers."

Q: Hi, Referencing the recent questions on GSY, here is some color from CIBC on the rationale for their Downgrade to Neutral. Please publish, at your discretion, with or without your comments.

"Downgrading Go Easy To Neutral"

"After reviewing draft regulations for the new interest rate cap, it has come to
our attention that a consultation process was recently completed examining a
further reduction to the rate cap. The timing of the consultation was much
earlier than expected, and we are left to wonder if it was scheduled
intentionally to conclude in advance of the 2024 Budget. We have no basis to
speculate on the outcome and no proprietary insight on the decision-making
process of the Finance Minister’s office. However, we fear that a political lens
might be more appropriate in assessing the probability of further action on the
interest rate cap than an academic one. There has clearly been some forward
progress on this file and it simply doesn’t feel prudent to maintain an
Outperformer rating on goeasy in advance of the Budget. We are
downgrading GSY to Neutral and maintain our $160 price target.

Our concern, however, is that decisions of this nature can sometimes be influenced by the desire to achieve political objectives rather than engage in a balanced assessment of a complicated issue. The considerations described above did not prevent the government from taking action on the initial reduction to the interest rate cap, and our concern is that it may not stop it from taking action to reduce the rate cap further.

We believe that the first sentence of the draft regulations may be somewhat revealing regarding the federal government’s sentiment towards instalment lenders:
“Predatory lenders take advantage of some of the most vulnerable people in our communities, including low-income Canadians, newcomers to Canada, and those with limited credit history—often by extending very high interest rate loans.” Describing instalment lenders as “predatory” sounds almost adversarial or outright hostile, in our view.

Bottom Line

In our view, the range of potential outcomes appears to be skewed asymmetrically negative. On the one hand, the federal government could elect to take no action and this would become a non-event to shares of goeasy. At the time of writing, we believe that this outcome is already priced into the stock. GSY shares have run up nearly 50% since late October (i.e., the same month that consultations were launched) and the P/E multiple has normalized back towards long-term averages (see the line chart in Exhibit 3). This suggests to us that there is little evidence that public market shareholders are bracing for an adverse outcome.
On the other hand, the federal government could take a heavy-handed approach and reduce the rate cap further. In this scenario, the magnitude of almost any reduction would likely be meaningful to the earnings power of GSY. "

Q: The marijuana business is not really my “thing”; however, this firm’s recent results are confounding my preconceptions on the state of the “weed scene”. Are they worth further analysis?

Q: thinking of bottom fishing energy with bias to natgas , which producers
would you consider most undervalued.
thanks

Q: Down this morning because of a rating down grade. Do you consider this a buying opportuity? Thank yiu

Q: Do you see any issues with buying the CDRs for some of the large cap US stocks (i.e. Google, Nvidia) if one does not have a US dollar trading account? Are there any downsides? They seem like a good option as they are USD hedged.

Q: on Jan.24 I asked for a% by sector for a balanced portfolio and then on the 29th for a % by sector for a growth portfolio. You gave the same answer for both. Is this correct, I would have assumed tech for example would have gotten a higher % in the growth vs the balanced

Q: We recently sold our rental units and are considering adding CAR.UN to our income portfolio for exposure to Canadian residential units and rental income. I'm curious about your thoughts on valuing Canadian REITs. What specific factors or metrics do you consider when determining if a REIT is in value territory?
TY

Q: Any reason you are aware of for the drop in gsy?

Thks
Marcel

Q: Hi 5i
I could not find Maplebear inc in you r data base.... Could you provide any insight/opinion to the following comments by wolfe research and the possibility of a potential acquisition ....

" the stock has rallied 13% so far this year, aided in part by a Wolfe Research analyst call last week that suggested Instacart could be a good acquisition target for Uber. Instacart last week declined to comment on the rumor. "

Thx
Jim