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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: Peter

I am working with a friend to restructure her portfolio It is criminal that the broker of a large bank investment division put all her accounts in high fee mutual funds The TFSA had 89 % in one mutual fund

My question is what is your opinion on holding short term ETF bond funds as opposed to holding interest sensitive stocks I do not see any reason to be in a bond fund

Could you recommend half a dozen Canadian stocks that would serve aws bond proxies

Could you also recommend some of the new rate reset preferreds with a floor on the rate reset

Thanks for your response and great service

Paul
Read Answer Asked by Paul on July 13, 2016
Q: I AM RE-SENDING. SOMEHOW MY QUESTIONS WAS NOT SENT. IF YOU DID RECEIVE THE ORIGINAL MY APOLOGIES.

Hello Peter and team,

I am considering adding to non-reg. acct. these preferred issues: BEP.PR.I; PPL.PR.M; TRP.PR.J; NA.PR.X for a steady predictable income for 5+ years. It is my understanding that these all have a minimum rate reset except NA which GOC yield + 4.90%. First could you rate these in terms of credit risk with the understanding that they all face the same interest rate risks going forward). Second, BEP.PR.I is a limited partnership issue and its distributions will be a mix of ordinary income, Canadian dividends and return of capital so would this be better held in a RRSP or are there any other complications here? Third, can you advise if these preferred stocks qualify as low credit risk overall, or are there others you would choose that would qualify as better credit risk while providing similar yields with a fixed rate reset feature and downward protection. If so could you suggest 4 or 5 better alternatives and advise why you feel they would be viewed as superior. Finally, am I correct in assuming that the minimum rate reset feature provides more downward protection should interest rates in fact rise 4 to 5 years from now.

Thanks for your great advice.

Joseph
Read Answer Asked by Joseph on July 13, 2016
Q: I am puzzled by this company. Other than their SG&A being too high the company seems, on the surface, to be improving. They had a major fire at their plant in PQ which created a supply issue with regards their customer base but that has been resolved. They had some problems with a few other countries trying to ignore their IP but that has pretty much resolved. There are only two countries that can sell their product (krill oil) into China and Canada is one of them. They just announced their first quarter results as below;
Revenues reached $11.3 million, up 270% versus last year
• Gross margin on sales rose to 30.5%
• Nutraceutical segment generated positive Adjusted EBITDA of $1.1 million compared to a loss of $3.2 million a year ago
• Completed first sale in Chinese market and of MaxSimil® in July
• Cash balance of $5 million
• Revised Revenues guidance from $41 to $43 million
I have my opinion on this company but I would appreciate your perspective.

Thanks
Pat Sherman
Read Answer Asked by Patrick on July 13, 2016
Q: Hi 5i: I’m a bit puzzled by Northland Power’s (NPI) strategic review announcement, as I am more used to seeing this move in the context of companies that have been struggling in one way or another and punished by the market. Over the time I have owned NPI it has appeared to be doing very well, with significant growth projects coming on stream and maintaining a very attractive stream of cashflow back to shareholders. At this point it still has more growth in the proverbial pipe and its support in the market has taken its yield down below 5%, even before the price pop on the review announcement. Is the review likely an indication that it has received overtures from a potential acquirer? What else might occasion the review in the context of a company that appears to be doing well and being rewarded with an increasing share price? Thanks for your thoughts!
Read Answer Asked by Lance on July 13, 2016
Q: Peter and Ryan and Co.:
Just wanted to say thank you for your unique and excellent service. Between reading the questions and answers, to the great reports, to the model portfolios, it's been and continues to be an amazing education for me and I'm sure many others, in the world of investing.
Having the benefit of your 20+ years of knowledge and experience is pure gold! So thanks again for all you do. cheers
Read Answer Asked by Andrew on July 13, 2016
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