Investment Q&A

Q: I have noticed different terminology used by diff firms when reporting performance. BMO (personal acct) uses 'avg ann compound rate of rtn'; RBC provides 'annualized' 'calendar' or 'cumulative'; Mawer uses annual or annualized (one can select); Invesco just reports 'performance'; Templeton reports 'annual or calendar perf'; G&M provides 1 and 5 yr total returns (compound % rtn) and a 3 yr compound % rtn. I tried using the internet/Investopedia with limited success. My question is: is "CAGR" (cmpd ann growth rate) the same as "annualized return" which is same as "compound % return"? Is there a resource that you know of that makes some sense of the different terminologies?
PS: I like to use the G&M as they provide perf numbers (as well as Div Gwth RAte, PEG ratios, etc) for stocks, ETFs, MFs on the same site, there should be some measure of consistency, thus facilitating an apple to apple comparison.

Q: I have both CGX and DIS in the consumer space, and although I have done well on both I am concerned these may be too reliant on the same movie-going public. My other consumer names are CTC.A and CCL.B. Do you agree I am too concentrated, would you recommend selling CGX and diversifying into a different part of the consumer space, and if so, what do you suggest?

Q: Hi,

Since financials seem to be firming up, I would like your overall take on Morgan Stanley and if this is a good entry point. Thanks.

Q: I am looking at adding ATD to my consumer staples portfolio. Could you please tell me the difference between ATD.A & ATD.B. They both have the same dividend, but ATD.B share price is approximately a dollar less. Naturally I would choose ATD.B, but is that right decision. Also, do you believe there is a better company in the consumer staples sector other than Couche-Tard. Thanks for your insight … Cal

Q: What is your opinion on Domtar these days, and prospects going forward for a long-term hold for dividend income? Thank you.

Q: Jason Donville was on BNN the other night, and said they sold Enghouse a couple of months back because it got too expensive. He also said Descartes is an okay company but its ROI was too low and its growth wasn't as good as CGI. I'm curious as to why you chose these two tech companies for the Balanced portfolio as opposed to CGI. And would you still hold them rather than CGI?

Q: Further to the concrete rail ties comment, in my travels (North Shore, Georgian Bay) I've noticed when a wooden pole needs to be replaced, hydro technicians install a pole made from a resin-like material. These new poles come in stackable pieces that enable the height of the pole to be adjusted according to the terrain. On seeing these, my thoughts were no more hydro poles full of giant woodpecker holes and are these new poles a threat to Stella Jones?

Q: How would you view a switch from FSV or CIG to ECI? Both offer a lower yield but do they have better growth to make up for it? I have these companies before the split so there would be some capital gains tax. Should I switch out from one(which one) or both to ECI or you think it does not make much of a difference?
Regards

Q: I am thinking of adding DOL to my portfolio. It has a very small dividend so I would be holding it primarily for growth? What is your advice?

Q: Over the last week or so, Mosaic has appreciated far more than Agrium (or even Potash Corp); can you explain this divergence within a sector in which, I would think, stocks would rise in-tandem? Conversely, given Mosaic's appreciation, is Agrium in some sense mis-priced?

Q: Can you please comment on the prospects for this company and the cancellation of coal contracts. They will apparently be reimbursed for their stranded assets. Mike

Q: You answered a question about BDI only a week ago, but earnings were released since then. Has your outlook changed? You stated the company was "...likely the strongest and best name in its sub sector..."
As per the 2015 results, BDI reduced capex and general expenses and they also paid down some debt. Payout ratio for 2015 was 43% and should be similar for 2016 since they reduced the dividend last quarter.
The stock fell again today with the pullback in oil and I'm tempted to put a little cash into this name with a 3 year time frame in mind. The yield is 13% right now, but I wouldn't be heartbroken if they reduced it again - as long as we saw some capital appreciation in the next few years. Thoughts?

Q: Hi Peter, Ryan and team,
You've clearly built quite a firm with a solid following, and equally clearly, you have an informed and knowledgeable clientele as well. I just read Fraser's advice on the issue I broached about HP's split into two last November, and CRA's foot-dragging on the matter.

Just a quick note to say thank you to you guys, and also to other members, and particularly Fraser!
Cheers,
Warren

Q: The market reactions right now are perplexing. With a financing 5% below the market price (that seemed oversubscribed as many only received 25-33% of what they requested) and an acquisition that is 25% accretive to shareholders, I'm surprised that ECI didn't pop 10-15% on the news, leaving still significant upward potential for the deal needing to close/execution risk, etc. Am I missing anything? Are they taking on too much debt perhaps? Or perhaps significant short selling to lock in a guaranteed profit and buying back on the financing...
To me, it seems an excellent time to purchase ECI, 5.5% yield while you wait and over the next 1-6 months, one would think the share price has as much as 25-30% upward potential.

Q: On February 25 Warren asked you a question about the tax treatment of the stock dividend which set up HPE as a spinoff from HPQ. I am not a tax expert but I have established that HP applied to CRA on November 1 for this transaction to be tax-free under S86.1 and it looks to me as though CRA have not yet ruled. Their website (search "foreign spinoffs") is silent on HP and their most recent approval relates to a transaction which took place around August. Absence of ruling would explain why the stock dividend would be included on the T5. No doubt CRA would take the position that one should file including the stock dividend as income and then re-file an amended return if and when they approve HP's application, but it may be worth waiting until nearer the deadline to see if CRA approves the application which would allow the stock dividend to be excluded (though the book values of both HPE and HPQ would then change). Hope this helps and hope somebody else can add more.

Q: which of the two has more growth potential between Savaria Inc and Knight Therapeutics? and which one would be considered less risky? which one would you prefer out of the two and why?

Q: Hello Gentlemen,

I am looking to add to my income portfolio this company. Yesterday they declared strategic acquisition of SEHAC Holdings and today IIROC made a decision to halt ECI trading... And stock is almost 4% down... Volumes were much higher than usual. Your comments would be highly appreciated! Thank you for great service!

Q: I have recently joined my local share club and am learning how to feel more comfortable acting as my own financial advisor.
I have transferred my existing mutual funds over to a TD Waterhouse Account and would like your advise on what to do next with these funds. I am 56 and would like this to grow over the next 10 years and then produce income for me as I have no pension. Thank You.
These are approximate
TDB889C - 29%
AIM1595C - 19%
AIM1571C - 13%
AIM1561 - 9%
AIM1581C - 7%
AIM1559C - 5%
Cash - 17.5%

Thank you

Q: Why is there a big drop today?
Thanks.
Jim

Q: Hello great team,
I own some split preferred FFN.pr.a. I am OK with 5.25% dividend and my understanding is that my principal investment and dividend are safe as long as NAV value of the unit remain above $10. Current NAV is ~$14. Are there any other risks (e.g. management) in losing my principal of $10 per preferred share other than drop in NAV value less than $10. Overall, what do you think about this preferred? DBRS rating is 4 high. The fund is managed by Qudravest Capital Management. I will appreciate any alternate suggestions to this preferred share? – I am OK with 5% return and safe principal.
Thanks