Investment Q&A

Q: I am retired living off dividend income. In your income portfolio, Loblaw stands out as it only has a 1.52% yield and a relatively low 5 year DGR. It seem that it was originally included for growth vs. income in 2014, however it had a higher yield then of 2%.
Do you still recommend Loblaw in the income portfolio with only a 1.52% yield? Are you considering switching for a higher yield company?
What other consumer non-cyclical looks attractive at current prices with a higher yield for an income portfolio?

Q: I purchased ZPW in April 2017 primarily as an income source in a stagnant or rising market. Since that time, the ETF has fallen 5%, and the monthly income has also dropped from $0.105/share to $0.095/share. At the same time, the S&P and DJIA have both risen 5%, so this ETF does not appear to be behaving as I would have expected.

Can you please explain why both the NAV and dividends have dropped for this ETF while markets rise? Is it related to the rise of the CAD vs USD or are there other factors at play here? If something fundamental has changed with this ETF, would you suggest any comparable alternative that would provide reliable income that is not fully taxed as income (e.g. bond ETF's). Thanks.

Q: What do you think of Australian Reit for income?

Q: would you buy this stock today, dave

Q: This U.S. technology stock has had a big run up this year. Could I get your opinion on buying it now given the price momentum?

Q: Is there any merit in considering a buy of these two stock in my TFSA, or would XHY as an ETF be better as I am a 77 year old senior?? Thanks.

Q: Hi great team of yours, how important is the downgrade of a stock by analyst coming out suddenly . Usually follow by a drop of price. Should a long term investor worry about it ?

Q: What are your views on CRH after the news release by the company?

Q: I am retired living off dividend income. I am building my portfolio based on your income portfolio. However, I am not interested in index or bond funds.
Can you recommend 3-4 income stocks that are looking most attractive at current prices and yielding +4% that are not in the income portfolio to replace the index/bond funds?

Q: Hi, Brian Acker recently recommended Met Life as a better/cheaper alternative to Canadian Life Insurance companies, such as SLF. If you have to pick two north american life insurance companies, regardless of country, what would they be? Focus is on some growth potential.

Thanks, Kelly

Q: What do you think of investing in fairfax India or fairfax Africa?

Q: I would like an update on LGO, also your opinion on the developments with Vanadium use in batteries (VRB's, VFB's, VRFB's, Redox) it appears to be much better than lithium batteries. Also it's use as a film for reflecting heat from windows, appears to have many potential uses.
Could you also explain the July 12 press release, doesn't make sense to me.

Q: This company first came on my radar in an issue of Capital Ideas Research. Since then, I've found out that Mark Schmiel (Fidelity Special Situations & Canadian Growth Company) holds approximately 10% of the companies shares in his funds.
What does Acuity do that makes them different? What are their prospects for growth?

Q: Where one should look to find the asset location of a stock (e.g,financial,technology,oilland gas and etc).Both for Canadian and US stocks) ?Thanks

Q: hi folks:

I am curious as to your understanding of the passage below
(excerpted from stockhouse BB's)

is there a better than even chance that CRH is yet another company being brought to earth by 'creative' accounting or is everything simply been overblown?

thanks in advance


CRH'S CONFUSING ACCOUNTING? Help needed to understand this.

CRH has a unique acquisition model in that the company tends to purchase portions of businesses (typically 51%, sometimes more), recording 100% of the acquired business revenues and earnings on its consolidated financial statements with adjustments made for specific amounts attributable to shareholders and attributable to non-controlling interests. This acquisition practice, while compliant with GAAP and sound from an accounting standpoint, requires that investors pay more attention to the details within the company's financials to get a complete picture of what is going on.

The company's most recent financial statements show a quarterly net and comprehensive income increase of 9% year over year from $3.03 million in Q1 2016 to $3.3 million in Q1 2017. The breakdown of these earnings is where investors need to pay attention.

In Q1 2016, CRH reported that net income attributable to shareholders was $2.96 million (or 97.7% of total earnings).

In Q1 2017, CRH reported that net income attributable to shareholders was $1.54 million (or only 46.7% of total earnings).

Because of the company's acquisition model, stock-based compensation, and increases in finance-related costs, CRH is now paying out more than half of its earnings to non-controlling interests. This is a trend which has been ongoing for the past year with the shareholders portion of earnings consistently declining over time.

Looking at earnings per share (EPS), we can see that earnings have significantly underperformed expectations ($0.02 EPS attributable to shareholders compared to $0.07 EPS expected.

Consider this note from the most recent financial statements: The company has also stated its intention to acquire or develop additional GI anesthesia businesses. In the future, it may be necessary for the Company to raise additional funds for the continuing development of its business plan, including additional acquisitions.

Insiders selling large amounts of stock of late CRH directors David Johnson and Edward Wright sold a combined $5.71 million of stock at average prices between $7.45 and $11.05 in March, which amounts to nearly 1% of CRHs total float. As I have reported previously, insider selling is generally not an issue in large and very liquid equities with compensation structures reliant on stock options. In growth-related businesses, large stock option redemptions can be commonplace and may largely be ignored by the financial markets for those reasons. That said, any time nearly 1% of a company's stock is sold by insiders, questions undoubtedly come to mind.

Bottom line I am skeptical about CRHs growth strategy from the standpoint of a shareholder. It appears to me that the substantial dilution effect resulting from this growth strategy is one which will not benefit shareholders in the long run. My skepticism also extends to the recent large liquidation of stock by two company directors, making me more uneasy about this company's long-term prospects.

Q: In answer to Febin's question on Friday you said that "The stock reaction (crh) is likely appropriate, though, putting its risk/reward in line: thus we would do nothing here". How did you determine the risk/reward of Crh? What metrics/rational did you apply? I'm currently down 48% on a 1/2 position and appreciate your response. Thankyou.

Q: Getting pretty discouraged with the slide in CRH. Your advice...hang on? Buy more? Thx

Q: Which of these would you feel has a better outlook for growth going forwards. Do you think this sector is over priced considering the big promises made about infrastructure spending?

Thanks

Q: Greetings

You read my mind! I have been thinking of taking a position in BYD. To do so, I was planning on selling MX. I know that MX is a favoured stock.

I am not concerned about portfolio balancing but am looking for a bit more stability in my life now that I am retired.

Do you have a preference between these two stocks given my profile?

Thanks

Peter

Q: Hi folks:

My average cost for this is in the 7 dollar range. I held it up to 12 and now its going to south to fast for my liking. I bought this for a 3 to 5 year hold. A 27 percent decline in one day certainly can put investors in panic mode, and I need your humble professional opinion with what to do with this one. Is patience the key here or should I move the remaining capital to a knight or a Savaria for example.

Thank you for your professional advice.