Investment Q&A

Q: Good morning 5i!
Pembina’s (PPL) rise has resulted in it being 14.7% of my portfolio (retired, for dividend income), with the dividend now being less than 4%. I own 14 stocks, and am also in the oil/gas/energy world with a full position in ENF and a minor holding (.8%)in the more speculative/risky ABM.
I am considering trimming to a position of 10% or slightly less and biting the capital gain bullet. These funds I would invest in Crombie (CRR.UN). The increased dividend (CRR.UN pays a distribution of 6.67%, AFFO payout of about 89%) has about a 3 or 4 year payback on the extra taxes for 2014. I own other reits (about .75 positions in each of CAR.UN, HLP.UN, and MRG.UN) but nothing in the retail sector.
Crombie had a 90% ROC last year, and over the previous few years an average ROC of 62-65%, so I realize it will result in more taxes on an ongoing basis. I see no easy way for estimating the future ROC, and the net tax effect. I have every intention of holding CRR.UN indefinitely.
I would appreciate your comments on the advisability of this “rebalancing”.
Thanks!

Q: The market seems to like Lonestar's (LSI) bought deal announcement coming on the heels of the most recent quarterly results. I had a small position, added during recent weakness at $2.65 and am inclined to hold. What are your views on the deal and future prospects?

Q: Hi,

Would you buy Y at the current prices. Why is their PE ratio so low compared to other companies. If you have to choose the best groowth stocks right now which stocks would they be.

Q: Hello 5i team,
I have been reading your general guidelines on asset allocation in the various comments and have decided to add some fixed income in my portfolio.

My plan, in this case anyway, is to sell some companies that I hold in my RRSP and buy them back in my non-registered account.

One company that i am considering selling is Atco. Now, my question is whether, at this point in time, i would be better to buy back Atco, or one of its peers instead. I note in the RBC site that it cites Enbridge as a peer. I am not sure that they are the same but maybe so.
So, my question is whether i should buy a peer company or buy back Atco at this time? And on what basis would you decide this?
I should say that I suspect that Enbridge is fasting growing than Atco and has a higher dividend. I should say that I don<t immediatly need the dividend. Really appreciate your service and thanks for any help

Q: I'll need more great information from you guys.
Two of my holdings, Glenworth GNW is down about 7% from its recent highs. I have a small position I am wondering if I should add more if it looks like it is going to move back up.
A while back you had said that Cardiome PHARMA was okay, since then, the stock is down about 18% after I guess a bad quarter. I've had this stock for quite a while and it seems to be very disappointing. Is there any hope for it?
Thank you,
Dennis

Q: gwo and hwo what do you think of these companies and which do you prefer for income and growth. thanks

Q: Why is HWO down in the past few days and do you still think its a good long term hold?

Thanks

Q: Good Morning, could I please have your updated view on CSE and any comments related to their recently announced financing.
Thanks

Q: Peter, NVC ctarted trading yesterday on the NASDAQ with 125m shares moving, symbol NVCN. They still do not make, and in fact still lose money. Do you still think it is best to await profitability before jumping in, despite the added exposure. Thanks

Q: Are any of the companies in your model portfolio besides Magna available on the US stock exchange? I'm going to have some US dollars available that I would like to use on a model portfolio stock if possible. thx!

Q: I have held POT since the $34. range so I am happy with the results to date. However I am wondering if this might be a good time to sell and switch into something with more torque, possibly in the industrial sector. POT represents approx 4%. Any suggestions or perhaps with talk of a possible buyer perhaps holding is ok.
Thanks. As always your service is extraordinarily helpful & informative.

Q: Your opinion on KPT and ACC?
Both yielding close to 5%.
Any other equivalent safe choices?

Q: Hi Peter
I have held LIF for many years.
Could you or your team please give your appraisal of LIF.
The price has gone down steadily since Jan. Results were reported May 6. How were they in your opinion? Would you consider adding to a position at the current price?

Q: Could I please get your comments on HDB-N. The long term chart looks good. What is your opinion on investing in an India bank? Is there anything special about India accounting principles I should know about? Thanks for your help.

Q: Dear Gentlemen,
Methanex (MX)
I have MX, double since buy. but lost 23% last few months. 3,5% of PF. Don't need cash, but maybe buying better company from I5 PF
Your advice Hold or sell.
Thank You, and Best Regards

Q: Hi Peter & 5i: Just a comment on Mark’s question about whether REITs should be held in RSPs. In my view it depends on (1) which REITs you are talking about and (2) an evaluation of all of your accounts and holdings. The second part is just that the question of where you hold something for tax reasons can really only be evaluated against what your alternative holdings arrangements might be. So it takes into account what the REIT might displace if you were to hold it in a particular account and what might be the costs and tax consequences of the whole shebang. The “which REIT” question takes account of how the REITs themselves designate the money they are distributing. Some REITs (like Artis, AX.UN, for example) have designated nearly all of their distributions as Return of Capital (ROC) for many years. This effectively means that instead of paying distributions that would be fully taxed as equivalent to interest income, the designation lets you have the money with no immediate tax consequences but instead reduces your adjusted cost base (i.e. the book value of the holding in your account) by an amount equivalent to the payments designated ROC. The effect is that the ROC designation converts that income into an unrealized capital gain that will defer the taxation until you sell the units. So you get the benefit of having access to the untaxed capital distribution until you sell. Then when you do sell, the gain is taxed at the capital gains rate (1/2 of your top marginal rate at the time). This is a potential advantage to the unit holder, which would be lost if the units were held in an RSP. Inside the RSP you would get the tax deferral benefit on both the income and any gain on a sale of the units. But then once you get to the point where you are taking the money out of the RSP it all gets taxed as regular income. With REITs whose trust distributions are designated as “interest income” or “other income,” just like bonds these attract your highest tax rates anyway, so you don’t lose a lower tax rate opportunity by holding them in an RSP, and you’d would likely do better on them in the RSP if the presumption holds true that in retirement, when you are expecting to draw on the RSP, you will likely be paying lower tax rates because you’ll have less income than you do when you are working. You can find out about most REITs’ tax designations on previous years’ distributions by looking through the investor information on their websites. It isn’t a guarantee they’ll do it exactly the same way in each subsequent year but is a pretty decent indicator of what they may do. Hope that’s useful!

Q: Hi,
Automatic Data Processing Inc NASDAQ:ADP -Your assessment please on ADP as a long term holding - mostly as for it's dividend. It appears to be a consistent dividend grower, but are there other US stocks that you would recommend ahead of ADP for a combination of growth and dividend growth/performance. A Report at TD by Thomson Reuters has recommendations varying from Sell to Strong Buy?
Thank you.

Q: Hi Team, What are your thoughts on Neptune's (NTB) results.

Q: I would appreciate your opinion on VSN Veresen as to growth,
management and do you feel the dividend is sustainable?
Thank You for all the great information.

Q: Hello, your last comment regarding MRC indicated an investor presentation earlier this month. Was anything gleaned from same. It is priced today at .8/book so is very cheap. I am thinking of buying for capital appreciation. Is it presently a buy? Thank you, Bill Y