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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: I realize these are all in different sectors but,all have 8% plus dividends; for an RSP account. Diversification not an issue.Which in your view do you like the best and has the best up side as well as maintaining its dividend, mid to long term.
Read Answer Asked by Henry on August 17, 2016
Q: BAS-Basic energy service is it a good time to bye with a 5 year timeframe.
Read Answer Asked by Dan on August 17, 2016
Q: I've owned this fund for quite some time. It trades consistently at around 30% below it's NAV. The yield is decent and appears safe/reliable. I was thinking about adding to my position for the yield and "hopefully" some share appreciation or at least limited downside. The price to NAV seems long overdue to improve and the company continues to buy back units. What are your thoughts about this investment going forward and buying at today's valuation?

Thank you
Read Answer Asked by Douglas on August 17, 2016
Q: Can the terms of the recently announced debenture be seen to suggest good things are in store for this company? The deal has a conversion option that is 30% - 40% higher than the current stock price. Given that this stock has shown very little growth over the past five years and you have suggested previously that you feel it is primarily an income stock it seems like a high bar to reach to convert. Since this is a bought deal, I would assume that this means the underwriters think this conversion price is quite attractive. Why would the conversion have been set at such a price? Does this strongly suggest something is in the works from a growth/acquisition point of view? And is the interest rate being paid expensive/cheap?

On a secondary note, is the debt from the previous takeover declining at a reasonable rate?

As always, appreciate your insight. I would also like to add that the changes you instituted several months ago are really working well. I am a long time subscriber and I keep learning more and more every day, so thanks.

Paul F.
Read Answer Asked by Paul on August 17, 2016
Q: The following is an excerpt from High Liner's website that probably contributed to the steep increase in share price yesterday:

"On August 16, 2016, High Liner Foods entered into a purchase and sale agreement ( the "Agreement") with Blue Harvest Fisheries, whereby Blue Harvest will acquire the assets of High Liner's scallop business, along with its facility in New Bedford, Massachusetts. Under the Agreement, High Liner will receive cash proceeds of $8 million for the business and facility, plus additional amounts for High Liner scallop inventories. Following completion of the transaction, High Liner will continue to offer scallops to its customers through an ongoing supply agreement with Blue Harvest. The transaction is expected to close within the next several weeks. The scallop processing facility was fully operational at the time the Agreement was entered into, but value-added fish operations had ceased at this facility in mid-July 2016, following the transfer of this production to the Company's other manufacturing facilities."
Read Answer Asked by Scot on August 17, 2016
Q: Hi Peter, Ryan, and Team, In today's question from Albert, where would ZLB fit into the mix? I realize that it has a lower yield than PDC, but a better long-term record than it or CDZ. Your thoughts? As always, the advice I receive from 5i is invaluable!
Read Answer Asked by Jerry on August 17, 2016
Q: I appreciate your answer to Brian on the results today. It seems to me they were very strong, but the stock has been down 1 to 2 % this morning. My question is, that on any given day, (on average) would a rise in the Canadian dollar have an inverse effect on the price of this equity? I seem to notice that the dollar fluctuation often seems to affect the valuation of stocks that trade of more than one exchange quite markedly.
Read Answer Asked by Jim on August 17, 2016
Q: Peter and Co., may I please have your response to the following quote from HWO's website? The drop in the stock appears to imply that there are significant problems. Only a few days notice was given before the departure.
"High Arctic also announces that Darren Greer is resigning from the position of President, International Operations in order to pursue another senior executive opportunity in an Australian exploration and production company effective August 19, 2016."
Read Answer Asked by Ed on August 17, 2016
Q: Regarding my question earlier about 2 REIT's to diversify existing position in AX.un, I probably should have pointed out preference for market cap and mimimum current yield. I like (and anticipated) your recommendation of Chartwell however IIP.un sacrifices too much current yield and market cap security to make up for potential growth for me. Would CAR.un fit nicely given my desire for a larger market cap? Is H&R too much like AX.un? thx!
Read Answer Asked by Tom on August 17, 2016
Q: Why the big increase on High Liner Foods today Aug.16 of over .12 percent, and on Stella-Jones is the decrease done or what is a good entry point to buy, thus is HLF overdone on the up side and is SJ overdone on the down size, thank you in advance.
Read Answer Asked by Herbert on August 17, 2016
Q: I would like to commend Peter, and poster Robert and his post.

Right ON!!!

98% of people need a diversified portfolio and no one gets every investment to work out. No one.

Even though I am one who prefers a more concentrated portfolio with more effort and patience put towards my selections I never get everyone to work out as I had hoped and predicted. However, patience even mends the bad ones over time to some degree if they have good management.

During my continuing education in this investing in businesses thing (25 years) I have learned that even the big guys/girls that manage $1/2 billion and more routinely have an investment go the way of the DoDo bird or at least they end up selling after 2 years for a smallish loss (lottery win size for most people).

We all have to take ownership when we plunk our money down. 5i gives their opinion which is what we pay for. We may not agree always but ultimately it is our choice. 5i cannot get into more detailed explanations and analysis because many members do not want that nor would they understand it. This is just they way it is.

And I agree the markets are at all time highs which is scary. My finger is on the Shorting button, LOL. And am waiting for good companies to go on sale to buy.

The Shiller PE on the U.S. market, an often watched indicator, is at 27.0 today which is considered explosive, unsafe and dangerous area. Anything above 23 is unsafe territory historically. 15 is normal.

So be careful out there. Diversify and have some cash (amo, ammunition) sitting on the sidelines for good buy opportunities as they present themselves. PATIENCE is always rewarded.

Incoming dividends is lower our cost base, ACB, on many of our stocks (at least for me) so my at risk $ is getting lower as time passes.

Heck, even the road from Toronto to Calgary is not a straight ride. It goes up and down, and left and right but it gets one to the destination with some patience. And think of all the things one gets to see and learn along the way.

Have a great day.
Read Answer Asked by Stan (1) on August 17, 2016
Q: I sold my shares in AVO today and intend to replace them within my TFSA with either Shopify or any other that you may recommend. The ones that I do not have from the growth portfolio are GUD PEO QHR RRX and SH.
Is there a defined price for the recent share offering that would define the trading price range?
If your recommendation would be to go with SH over the others mentioned above, do you suggest I wait for now till the price settles - say around the anticipated offer price? Do you have an opinion on what that might be? The price was quite volatile today.
Read Answer Asked by Rajiv on August 17, 2016
Q: Hello 5i team,

Not sure why my question does not reach you as I've tried twice in the past 2 weeks.......hope it gets through to you in this 3rd attempt.

I am 61 years old and about 16% of my overall portfolio is in bonds. The rest is in income stocks and growth stocks similar to 5i portfolio. The yield return of fixed income instruments is so low currently and I am rather comfortable owning income stocks. Now, I have $60,000 in cash in RRSP and I have the following options. Please comment on each option and your preference and recommendations.
1. To buy several corporate bonds with maturity of 3 to 5 years and to hold till maturity.
2. To buy more income stocks like AW.UN or EIF.un
3. To buy ETF of inflation bonds
4. To buy ETF of high yield bonds
5. To buy ETF of US corporate bonds

Please advise preferred ETF for option 3, 4 and 5.
Many thanks.
Read Answer Asked by Willie on August 17, 2016
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