Investment Q&A

Q: I am building a diversified portfolio of healthcare stocks. I own JNJ, AMGN, MDT, CVS and MRNA. These are 2.9%, 3.8%, 2.5%, 4% and 0.5% of my portfolio respectively. Is this a high quality portfolio? Would you recommend any changes?

Q: Hi there

I own CVS as part of a diversified portfolio. I’ve held it through its latest funk of a year or more. Suddenly as the result of a somewhat promising earnings report yesterday it’s on a nice uptick.

It’s quite cheap with a nice dividend but some say that’s for a reason even though they seem to have assembled all the pieces for complete healthcare service offering (pharmacy, insurance, medical services tied to us heaithcare program).

Can you give me your thoughts going forward? Buy/Add? Hold? Sell?

Thank you !

Q:
This question is prompted by concern I felt upon seeing portfolio consists almost entirely of growth companies, few dividend payers, and no bond holdings. After reading the notes, articles and opinions of several financial analysts and investment gurus, I gather:
— that “value investing” has not worked for the past decade; and
— that now however is the time for investors to adopt a Value-centric approach.
Do you agree with this sentiment? If yes, does 5i have screens (or links to them) of US-listed companies whose share prices have declined more than fundamentals justify AND whose prospects for share price appreciation look good going forward ?

Additionally, IF, and *ONLY IF*, you believe “value’s time has come” do you have a US-listed value-oriented ETF that you care to recommend? I reviewed these two ETFs: ILCV and VLUE. Do you like either one? If yes, do you prefer one over the other? Or do you have other suggestions? Thanks! :ao: sab

Q: Thanks for your response to my previous question. Just when I thought it couldn't get any worse, CVS is down 4% this morning on this news:

A Senate bill, sponsored by Sens. Elizabeth Warren (D., Mass.) and Josh Hawley (R., Mo.), would force the companies that own health insurers or pharmacy-benefit managers to divest their pharmacy businesses within three years.

But surely, if CVS divested their pharmacy business then the proceeds could be used to reduce their debt? So why has the market reaction been so harsh?

Q: In your reply to Brad, who asked for your views on CVS, you said: The issues are very very high debt (15X cash flow!!!) and low growth. You also said: We might be willing to await a turnaround here if it was not for the giant debt level.

And yet:

Argus Research rates CVS a buy with a Medium Financial Strength rating.

Morningstar has a 5-star US$93 fair value rating on the stock.

There are 13 analysts with a buy rating, 4 with a hold rating, none with a sell rating and a $67.5 average target price.

CVS was one of Lorne Steinberg's top picks on Market Call today.

And on TD Webroker's Peer/Industry Comparison screen, CVS has a debt to capital ratio of 46.5% compared to 50.5% for the industry. How is this a giant debt level?

Could you recheck your numbers on CVS and see if you still come to the same giant debt level conclusion? Does your negative view of the stock take into account its depressed price at only 0.9 times book?

Q: Recent thoughts please on CVS?

Thank you,
Brad

Q: Hi, would you continue to hold this stock?

Thanks
Paul

Q: Hi Group can you please rate in order of your preference for short term trading not to buy and hold . Give me the ones with the most potential to grow. Most of the ones I have identified have been in the tank lately and should be ripe for some sort of recovery. Also if you have any good ideas that fit the criteria please feel free to add/rate the opportunity as you see it.

Q: Hi group I have taken profits on QSR,MCD,GSY,BYD,WSP,CSU,ARC. So my question in what order and at what price do i get back in i own the others, as listed so please rate them also for adding same format. Thanks for your help with this

Q: Thinking of taking a position. Seems oversold for a quality company. What are your thoughts for short and long term buys?

Q: Good morning;

I own the 4 stocks referenced at a 4.5% weight in my portfolio. ILMN was purchased as a turnaround candidate so I wish to keep it. XLV to hedge. UNH I have my initial investment out; it has bounced around quite a bit lately with no clear path but a target +/$75 above current price. May 1st you commented CVS is not one you would add to and it could be a value trap. I've owned it since prior to COVID and missed my opportunity to sell it off.

I want to stay exposed and grow my exposure a bit to the US (and maybe Canadian) health care sector. Other than a very occasional flare of positive results this sector has not been very beneficial to my portfolio other than a bit of modest income. I could part with (in order) CVS, UNH, XLV to build better growth exposure. I would appreciate your top 5 recommended options along with why you would put them on the list.

Thanks very much.

Dave

Q: Would you add to a small position in a dividend portfolio with this drop?

Q: Stumbled on a Morningstar article which pointed out these companies share prices are relatively low in relation to their fair value. Wondering if you comment on these and if you think they have some potential for gains. If there is some opportunity with these, can you rate in order of your preference.
Thanks

Q: I own LLY and GEHC and am looking to add CVS or SYK? I'm actually open to selling LLY or GECH, but my point is I'd like to keep 3.

Please let me know your thoughts.

Q: Hi 5i
Hum down 15% today after earnings and a poor guidance.....also CVS down ...What is your opinion on HUM and what does the future look like for these companies....short term/long term.
Is this industry in trouble?
Where do you see things go from here and a what price does this company become attractive investment.

thx

Q: Hi 5i
CVS is down over 5% today and over 10 % since Jan4...What do you think is going on and is this an opportunity to start a position? Looking out 1-2 years......What would be attractive price?
Thanks
jim

Q: Hi Group can you give me your thoughts on 2 Financial + 2 healthcare
stocks. The above picks are just shots in the dark are there others you like better or? also short explanation with you suggestions would be helpful

Q: This period of seasonal weakness is a great time for some early Christmas shopping. I sold a part position in NVO a while ago and am looking to reinvest proceeds to increase my health care holdings.

Considering current valuations, what would you recommend as a good complement to expand and diversify?

Thanks in advance.

Q: I would appreciate you comments about the latest news from Blue Cross in California. Will obviously hurt CVS. Time to get out.

Thanks

Dave.

Q: Hi 5i Team,

I'm wondering if you have any suggestions for using options to generate routine income. So far, I mainly write puts on companies that are temporarily out of favour but that I wouldn't mind holding for a while and also collect a dividend if I end up having to hold for a bit (e.g, ENB, TD, BN, CVS). I do this randomly (e.g., once or twice a year on a couple of companies) but would like to increase the frequency. I don't have a good sense for what expiry date I should choose (I typically go out six months or more) or the best strike price (I usually pick around the current price). Do you have any good ideas for the current market that you could suggest and could you recommend a resource to do more research. I'm currently thinking of writing puts on TD, CVS, and BTI and wondering if I should scatter their expiry dates.

Thanks as always,
Lisa