Investment Q&A

Q: Peter & Team, back to Delphi, I am afraid. We have been floundering to explain the precipitous share price decline over past 2 months. A BNN market call participant was asked about DEE recently. While a core hold of his, he was critical of management for not raising capital when prices were in the high's of $4 citing an over geared balance sheet. I wonder if we have been underestimating the adverse impact on the balance sheet of the Wapiti sale collapsing? Is the leverage all that bad? Debt to equity is $165 million on $255 million; debt to assets is $165 million on $518 million; net debt to annualized FFO is 1.9x (albeit higher than the Crescent Point "gold standard" of 1.1x); adjusted quarter EBT is $6.6 million (adjusting for property gains and financial contracts) about 2.3x interest cost- does seem a bit tight.

I also note projected gas price looks low at $3.80 per mcf and they have done a lousy job hedging where contract prices are on the $3.70 per mcf range.

Your comments, please. Thank you.

Q: I should've waited a day to ask about EQI Could you give me some colour on their latest results?

TIA

Q: Hi, This is more of a trading comment to supplement your response to Steven's question about Cineplex weakness at the open, yesterday. I did not like the results too and sold half of my longtime position at open. But bought back 0.75 higher within a few minutes when noticed strength. I usually place a counter Buy order at a slightly lower price and watch, if I like a co. long term (like Cineplex). It has helped many times. Thanks

Q: Northern Offshore, NFSHF on the pink sheets has really dropped and the yield is very high right now. Do you think dividend will be cut? I was also wondering if the dividend as well as any possible capital gains would be exempt from any witholding tax if I bought it in my TFSA account. Would now be a good time to buy?

Q: In response to Steven's question on Cineplex (cgx), Patrick Horan, who has been short Cineplex since at least August, mentioned on BNN, that the CEO of Cineplex stated the possibility of acquiring Carmike Cinemas as one option available to create shareholder value. Horan thinks this is what caused the spike in Cineplex, yesterday.

I'm not certain I believe that narrative but I started researching US cinemas and it seems like quite a few publicly traded cinemas, in the US, are posturing about making acquisitions or putting themselves up for sale (Regal Entertainment, Cinemark etc.).

So perhaps it was takeover speculation in the sector that partially fuelled Cineplex's move yesterday.

Q: Please explain the drastic drop in the stock price. It seems to me that Yamana gets beat up more than the other gold stocks. Also as a new investor in the markets can U please tell me how the market works . If a price of one dollars per share is sold , I assume that the co gets the dollar, but if the price drops to 90 cents does the company have to pay back ? Thanks Don

Q: Hello Peter and team,

The carnage in the energy sector continues, so it is time to see where my non-registered portfolio really is on its energy weighting. Please help me understand if I am really overweight in energy. I know it is a personal choice what percentage of a portfolio is exposed to energy, and the numbers being tossed around are 10% to 15% being ideal for most investors.

If I use the TMX sector categorization then I have 33% of my portfolio in energy. As of the close on Nov 13th the stocks are:

PPL (+52%)
IPL (+37%)
ENB (+29%)
WCP (+22%)
SCL (-3.5%)
CPG (-7.6%)
SGY (-10%)
TOU (-18%)

But your sector categorization is a little different. You consider PPL/IPL/ENB as utilities, and SCL seems to be a basic material. If you slice it that way my energy component is 16%, utilities 14%, and basic material at 2.8%

When you say a weighting in energy of around 10% to 15% is ideal, would you include the pipelines, and material stocks like SCL in that weighting?

Which one(s) would you trim or eliminate to reduce the energy weighting?


Paul J.

Q: What do you think of dr results. thanks Also lw leisure world reported today could you comment on their results too thanks

Q: Hi Peter I am thinking of adding Bam And BA to my portfolio. Do you have an opinion on these 2. I am a moderate investor with a focus on steady growth

Q: Hi Guys,

AHF is down to 86 cents today. Do you still rate it a B-?

Do you know how much of the company is owned by insiders in total and by Mr. Ben Cheng in particular?

Are they keeping clients?

Thanks
John

Q: Good Morning 5i
Appreciate your first view of this mornings earnings and comments. Thanks.

Q: What is the best way or method for keeping track of your adjusted cost base when using a drip program - one that is the least time consuming or is there such a thing.

Q: Hi Peter & Co,
The energy sector (10%)of my RRIF portfolio contains BTE, CPG, TOU, VET and WCP. I intend to sell the first 2 sometime in the spring of 2015 and in the meantime to add now to the last 3 and take advantage of the lower prices.
Do I make sense to you?
Thanks,
Tony

Q: Is RDM competing with with DH? Who else competes with RDM? This seems like a very large space but RDM has very small revenue. Does RDM have a strong competitive advantage?

Q: Hi Peter and Staff
I choose so far to hold a lot of stocks in each sector(doing my own ETF I guess) .This is so you know that the industry each of the companies are in below in relation to my overall portfolio % wise is not an issue in making your recommendation.
Would you please look at the two lists below and if you feel worthwhile to dump 2 or 3 of the ones I own in favour of 2 or 3 of the ones various people recommend in the other list, please say so in order of trades,brief explanation as to why please.You can assume no rush to realize benefits,assume 10 years
POSSIBLE DUMPS
AIM,CHE.UN,CJR.B,DII.B,MTL,NWC,PZA,XSR,TPK
POSSIBLE ADDS
ADW.A,ADN,AGT,CSW.A,KBL,KPT,LNF,RUS,TRI,WEF

You can safely assume that I do already own the stocks with reasonable dividend levels in these sectors that are in your model portfolio.
Thanks for all you do
Dennis

Q: How on earth does a 7 year old get an rrsp ??

Q: Comments on earnings release and outlook going forward.

Q: Just a comment on BNS being classified as a "DOG" by G & M.BUY the "DOG" as there is a proven theory that each of the big 6 canadian banks takes its turn to appreciate.They were amongst the World's strongest banks in 2013(with 2012 ranking in bracket): 3)CIBC(3) 4)RY(6) 7)BNS(18) 17)NA(5) 8)TD(4) & BMO(22)

Q: Good Morning!
Thank you for keeping me calm while I rode through the September dip. I could hardly believe that I kept my head and bought Magna when it was down! I sold some gold at a loss to make the purchase, but I'm almost back up to where I started in August.

Magna is dropping slightly after a quick dip and recovery this week. I am trying to figure out the fluctuation and the drop. As a learning investor I need some help to understand this November 10th news release: "TSX Accepts Notice of Intention to Make Normal Course Issuer Bid".

Is Magna issuing new shares or buying back shares?
What do you predict for Magna going forward? I think I saw that the projected share price for next year is $150.00.

Gail

Q: 1:42 PM 11/13/2014

Hello Peter :
I currently have a 17.5% position in precious metal stocks [FNV 10.2%, G 3.9%, SLW 3.02%, SSL 0.4%]. This is partly due to an inheritance about 2 years ago whereby the shares were transferred in to our account at the very high ACBs prevailing at the time. We sold a good portion of these stocks at that time but still need to reduce.

We choose to keep Franco Nevada in it's entirety as our only gold holding as it is a stable powerful, growing, well-financed company with low overheads and an acceptable dividend, but we do plan to sell G, SLW, and SSL even though these are very good companies. These 3 stocks are down 31%, 29% and 39% respectively from their ACBs.

The plan is to invest the proceeds into dividend-growing high quality stocks as we need the dividend income along with reasonable growth. We could add to our already existing positions in : Corby[CSW.A 2.1%], A&W[AW.UN 2.3%], Emera[EMA 2.2%], Telus[T 1.8%].

Or we could initiate new positions in two or more of Enercare [ECI], Chartwell [CSH.UN], BMO REITs [ZRE], Cervus [CVL], Alaris [AD], or AgGrowth [AFN], all with dividends in the 4-5% range.

I believe [hope] that gold and silver prices will rebound over the next few months or year [or then again maybe they won't] and the issue is whether to sell them now at a low or whether to do nothing and wait until the losses are greatly reduced. We cannot use the tax loss now and would have to carry it forward for future years. So the question now is whether the gold stocks will rise faster in price than the stocks we wish to buy?

What would be your strategy - switch now or wait - and which of the 10 stocks listed above would be the best buys now or in a year or so, and why?

Your opinion always greatly appreciated...... Paul K.