Investment Q&A

Q: When Canadian housing prices were much lower than today several years ago there was much talk about American investors being short our banks due to being overextended on mortgages, something I have not heard recently. How much is the short position on them now vs. then and which banks have the most exposure to defaults on mortgages presently?

Q: In your view, what impact will the Liberal/NDP cash grab on the Canadian Banks have on their stock prices. Each of them are expanding outside Canada....does this help mitigate any new tax? Is there one Bank that is better able to handle things and more favored now as a result? Would you just begin exiting the Banks? Thank you for your insight.

Q: Good Morning,

For yield - I am considering adding to or acquiring many of the above noted stocks.

Please rate in terms yield, growth potential and safety.

Also add any others I might consider.

Thanks very much.

Q: Is it better to buy CM before the split or try to wait for a dip and buy it afterwards?

Thanks!

Q: Hi Peter/Ryan, I have 100 CM shares and they might be splitting 2/1, if I was thinking of selling some of them is it better to sell before or after the split or does it mater and how does it effect the adjusted cost. Thanks

Q: Hi, Market drop in the morning, Today and complete reversal after President Biden's briefing about Russia invasion of Ukraine was simply Extraordinary. Nasdaq, of course was the huge winner. Banks, on the other hand, were really weak at the open and did not gain much traction, during the day. Could you try to explain the disconnect, please.

RBC results were quite impressive, but it did not help the stock, Today.

CNBC, Bob Pisani commented that US Financials have been under pressure, the whole week.

We added some CM,RY,TD and BNS in the morning, for dividends and additional exposure to financials, to take advantage of market drop and due to expectations of the sector benefitting from rising rates. Do you consider it a wise move?

Thank You

Q: Hi 5i Team - Could you provide two or three top picks in each of the following sectors: Real Estate, Consumer Staples, Financial, Industrial. Any market cap is fine but with a focus on mid cap. Also with a focus on Canadian Equities.
Thanks.

Q: Hi group - I am a medium risk investor - Can you please give me your top picks + % weighting in the top sectors - Financial, Industrials, Materials , Energy, Health care , real estate, Tech Thanks

Q: Recently Veritas’ D.Souza cut most of the big canadian banks to sell. Could I have forward P/E for each of them? I doubt it, but do you agree with M. D’Souza that the banks are a bit overpriced looking at 2023?
Thanks

Q: I hold these 8 equities in one part of my portfolio. I am not sure if it makes a difference, I am up on some and down on others.

The approximate weight and the gain / loss is shown for each. ATZ (3%, +17%); CNR (4%, -7%); CM (4%, +8%); Acuity Ads (0.5%, - 37%); MG (4%; - 11%) RY (6% + 5.5%).

I wish to free up about 2% of the portfolio for a cash requirement. Taxes are not an issue.

Two questions: First, if you were me, which / what would you sell to free up some cash? Second, is there anything here that should be let go because it is time to move on from it? I know AT is too small to make much impact but I am inclined to continue to hold it, for a potential bounce. Many thanks

Q: I bought a full position in CM at $72.70 in 2020 in an unregistered account. I generally look for dividend payers over or near 5%, so I could sell and purchase another company that pays a higher dividend. Today it is at about $165, which means a substantial capital gain.

My concept is to sell and buy something relatively stable like PPL, ENB, BCE and such. I calculate the return on my initial tax cost to be about 13-15% annually in higher dividends, at current pay levels, with what I see as similar risk.
However, I have read that the banks are maybe expected to again have a much higher than normal dividend raise, which might mean CM goes higher (assuming that isn’t already priced in).
I would appreciate your thoughts on this concept, particularly in regards to CM. Is it time to sell and put the funds to work elsewhere? I thought I had asked this question last Friday, by the way, but it is not answered so assume it is lost in the ether.
Thanks! Paul K

Q: Banks had another big run in January. Are prices already reflecting all the good news for the banks, namely higher interest rates and a good economy?
Secondly if someone had new cash looking for a home in big cap blue chip dividend paying companies which of the financial, pipelines, telecom and real estate sectors give the best upside from here?
Thank-you.

Q: I am considering add more bank stocks and here's what I got based on their P/E:

TD:12.36x
RY:11.99x
BMO:11.69x
BNS:11.50x
CM:10.57x
NA: 10.79x

I have 150K cash available. Would you agree to add National Bank, CIBC and Bank of Novia Scotia equally since these 3 have the cheapest valuation?

Thanks,

Q: Hi Team,

I only own bank of Nova Scotia and look to add more weight on financial sector. Can you please make top two of your picks in the list of names?

Thank you,

Q: Hi, is it a good time to add to CDN banks, with expectation of higher rates and trend for returning capital to shareholders. If so, which ones will you consider as winners, over next several years ? Could you rate them, in order of priority ? in the same token, do you have a particular view on CIBC as the dividend yield and P/E ratio seem to be most attractive in the group ? Thank You

Q: Good day 5i Team, What's up with OSFI? The Canadian banks have been quite conservative during the pandemic but OSFI won't release them to give investors the dividend increase? They were heralded as the world's safest banks during the Great Financial Crisis, but somehow they will be last to increase dividends this time?. Even the banks in the EU and UK are released from holding additional funds. Do you have any good conspiracy theories? Keep up the great work and appreciate all you do for the little guys.

Q: With all the speculation about major dividend increases once restrictions are lifted, would investment in banks be a good short term strategy (hoping for a boost upon announcements), or has the expectation already been cooked into current prices? Any guesses as to who will announce the largest increase?

Q: I wd appreciate your ranking of the Canadian banks.
thank you

Q: Top 10 CAD Dividend Growth picks for RESP? 15 year time horizon.

If you have a link to such a portfolio would be happy to see.

Q: Retired, dividend-income investor who normally holds for the long term. I own a half position in Manulife and am down roughly 7%, including dividends. My long term plan was to sell MFC and rebuy a second Canadian Bank (I already have a full position in Royal Bank).

I have compared the various metrics (P/BV, P/CF, P/S, ROE, technicals, analysts estimates, etc.) for the above mentioned banks as well as against MFC.

Looking at the banks in isolation and already with a full position in RY, I've narrowed it down to either BNS (International exposure and current laggard due to Covid) or TD (more US exposure and 1 year laggard). Of the banks that I do not own, please rank them in order of the best total return over a sufficient period of time for Covid to have subsided (1-2 more years for improved vaccination coverage?). Do you agree with my rationale?

If you include MFC into the bank comparisons, where would you place MFC in the rankings? I have read to buy the banks when their P/E is < 11.0 and buy the insurance companies when their P/BV < 1.0. This would lead me to buy TD (P/E of 9.7) or keep MFC (P/BV of 1.0).

So...keep MFC versus take the loss in MFC and then buy BNS or TD? Your thoughts?

MFC is held in a taxable account and I have no problem taking a loss.

Thanks for your help....Steve