Investment Q&A

Q: If insurance co such as Great West, Sun Life etc. were start including Medical marijuana products under the prescription medications that would be covered under their various drug plans, (group or individual), would a company such as Loblaw (shoppers) be the (a) way to play this or is this eventuality already baked in? Would it be a material enough impact L or others? I have not to this point been able to see my way clear to investing an any of the producers which I sense you are in agreement. Any other suggestions as to how one might play this if in fact such a development would be material to the industry?

Q: It’s becoming increasingly clear Canada is facing challenges on many economic fronts from increasing regulatory burdens, inability to attract foerign capital and sub-national debt at the provincial level. Given that these, among many other, factors make Canada a questionable destination for investment, I’m wondering about your take on what this means going forward. Apart from an increased international focus, are there some Canadian companies doing business in Canada you feel can benefit from a potentially deteriorating economic scenario in Canada. I've recently taken a position in GSY and am considering DOL. Your thoughts on these and other suggestions would be greatly appreciated.

Q: I notice that David Rosenberg will be on Bnn this Friday with Andrew McCreath.
On May 19 He published an article in The Globe & Mail stating that Trumponomics will cause the next recession within the next 12 months.
If he is correct, am I right in assuming that interest rates will then to begin to decline , eventually leading to better prices down the road for the bond proxies?
Could you recomend from your portfolios the best recession proof companies with a history of regularly increasing their dividends?

Q: Greetings 5i,

Despite their lacklustre performance this year, I am very fond of consumer staple holdings that focus on food and household products. My reasoning is that I consider their essentiality, as well as their (at least theoretically) defensive nature make them excellent, steady, long-term holds that do not need to be constantly monitored; thereby providing a "sleep at night" factor which I highly prize. Thus, my current sector exposure consists of full positions (5%) in L and PG that, barring some fundamental catastrophe in either, I intend to hold indefinitely. I also hold AMZN (5%), but, due to the breadth of its business, consider it more of a "hybrid."

To these, I am considering adding a position in COST, as I feel that, in addition the aforementioned reasons for favouring staples, its business model is perhaps better equipped to withstand the "Amazon effect" than many other retailers (WMT, KG, etc.). I am also looking to add some geographic diversity to my retail exposure, and view the recent weakness in the stock as a good potential entry point.

However, I realize that this addition would increase my sector weighting, and possibly create some unnecessary overlap. I would therefore like to ask your advice regarding this addition, and whether my reasoning appears sound.

I am 36 years old, debt-free, and relatively conservative. My investment portfolio is solely for the purpose of expediting my retirement, and I will have no need of its funds for the foreseeable future. Excluding ETF's, my portfolio currently consists of 22 positions (with none exceeding a 5% weighting), and is, for my goals and investing style, well diversified across sectors.

Based on my situation, does the addition of COST sound like a reasonable course of action to you?

Thank you.

Q: I need to further reduce the number of stocks I have in my portfolio. Which one of the above would you suggest I keep. Thanks. Ernie

Q: Hi 5i,
Can you please recommend some good dividend paying Canadian stocks that behave well during recessions. Can you also generalize and comment on the type of stocks that behave well and poorly during recessions.
thanks

Q: Waned to find out what your thoughts are on L and if this is where you would be in this space. What would be your other choice if not L.
Thanks as always.

Q: Good Morning,

How do you feel about Loblaw in general. Do you think the worst is over? I am considering a purchase as a more defensive name in the event of a down market / high interest rate scenario?

Q: I currently hold Loblaw (3% position) and Saputo (2% position). Which of these two companies have better growth prospects? Following Loblaw's earnings and given their considerable 'headwinds' (competition, minimum wage, bread price fixing fallout) I am considering shifting some funds from L to SAP. What do you think?....Glenn

Q: How is Loblaws performing compared to its peers? And what percentage of Loblaws sales/profits come from the Shoppers division? I have held Loblaws for a few years and while not happy with its performance, at least as it pertains to its share price, I hang on for portfolio reasons. However, I would have thought that Shoppers would enable Loblaws to outperform its sector, especially given the most recent results where Shoppers same-store sales were up over 3%.

Appreciate your insight.

Paul F.

Q: Do you feel that Saputo has better growth prospects and lower risk than Loblaw? I currently hold both (2% position in SAP, 3% position in L) and am considering trimming Loblaw and adding to Saputo. What do you think?....thank you....Glenn

Q: Does 5i have any concern about the tie between offshore accounts and Loblaws ?? I am getting nervous about Loblaw .. could you please offer your insight to this on going saga? And if you were going to switch out L in the Income Portfolio what would you switch to? Thanks for all you do.

Q: I have $35,000 total room in our TFSA for my wife and myself, 71 years of age. Together we have 60 equities in our Income portfolios dividend long term investing with a 10 year horizon mostly following the 5i Income portfolio. Not wanting to add new equities should I top to ENB, BCE, UTX. Loblaw, NWC, and SPB to get each up to about 2% weight or follow another venue that you may suggest?
I also have a five year GIC ladder in place, cash resource, and defined pension. I feel that with XGD at 1.82% weight I do not need to add to it.
Thank you
Stanley

Q: These stocks are held in my RRSP . Have had them for several years. Last year they were down and wondering if it's time to move on. I'm a buy and hold investor. Thanks for great service.

Q: Hello: It is probably way to early to guess, but I just want your thoughts about how selling marijuana might affect shoppers drug mart/loblaw,

Q: What do you think about Loblaw's recent admission of bread price-fixing for over 14 years - and what impact will it have on the company?

Q: Hi There,
I would like to increase my position in two of the six stocks listed.
Could you please advise which two companies you believe would be the best to add too at current levels.
Thank You

Q: You recently answered another question in the following words.
you may be best served by a well-diversified conservative (or even balanced) portfolio. For your equity component (what ever allocation you decide) stay focused on large-cap dividend payers and weight defensive sectors generously.

If I want to stay with Canadian stocks only, please name your top 10 stocks that would fit this bill.

Thanks.

Q: Today (Oct 10) you identified Loblaw (L.ca) as a "forever" hold. Have you all seen a doctor about this problem? L is in a most challenging and very vulnerable sector. Razor thin margins which cannot always be made up in high volume.

Please take this comment 9not a question) in good humor. I write tongue in cheek because the inclusion of a supermarket in your supplementary list baffled me no end.
Sent most RESPECTFULLY

Q: As a follow up question to that asked by Mary Ann about the ten "forever" stock ideas. You indicated a few names could be added to the list and I was interested if you could provide a few of the names you think could be added.