Investment Q&A

Q: Yesterday I asked you about a group of stocks with respect to trimming our positions to reduce our overall stock exposure.

Now I would appreciate it if you could categorize these stocks with respect to your opinion on the impact of Trump's election. Perhaps the categories could be: positive, negative, neutral, or not sure.

The stocks are:
BAM
BEP.UN
BIP.UN
BCE
EMA
FTS
NA
RY
SLF
TD

Q: My wife and I are mainly dividend investors. We tend to hold our stocks for many years. Due to the significant increase in the value of our stocks this year, we are considering reducing the percentage of some stocks in our portfolio by about 10%.

Could you please give your opinion as to which of the following stocks you would reduce. Would you reduce one or two selected stocks, or perhaps reduce across the board? All of the reductions would be in registered accounts. You can assume the stocks are all about the same percentage of our portfolio.

The stocks are:
BAM
BEP.UN
BIP.UN
BCE
EMA
FTS
NA
RY
SLF
TD

Q: Assuming the takeover of CWB goes ahead, what would be your assessment of risks relating to integration, culture clash, etc.? Do potential benefits outweigh these risks, in your opinion? Is this a buy now or wait and see?
Jack

Q: Portfolio Analytics has suggested I reduce my financials component. Over my several accounts, I own these 6 banks in Canada. What order would you sell them in (ignoring capital gains impact) ?

Q: Is there any concern at this point around the deal closing? Can you assign your estimate of a probability? thx

Q: Hi, Do you consider National Bank to be a good Canadian Bank to own, based on their flawless execution for a long period of time ? If so, after the recent sell off, what is a more prudent approach - To buy the * stock' now OR "Subscription receipts" to be listed, next week, which are likely to trade at a discount (what discount is reasonable ? ). considering cost to hold for 18 months period and a small probability of deal not going through ?

Would appreciate to elaborate pros and cons, Please !!

Thank You

Q: Hello 5i Team

I currently own shares of Canadian Western Bank (CWB) and National Bank (NA) in my TFSA.

The yield on the shares of CWB are approximately 1 % higher than yield on NA

The announced takeover of CWB by NA is at at a share ratio of 0.45 shares NA per 1 share CWB.

NA announced an public offering of NA shares at $112.30 concurrently with the takeover. This implies a price of 0.45 x $112.30 = $50.54 for shares of CWB.

This morning share of NA are trading below the offering price (~$110.40) and the share price of CWB are trading around $42.35 which implies an exchange ratio of 0.39.

Is there an opportunity to acquire shares of CWB at a small discount to the takeover premium (with the risk of the deal not being approved by the government) in the anticipation of the takeover and exchange for shares of NA or should I just let the deal close in 18 months (end of 2025)?

I would receive marginally more dividend income from the share of CWB while waiting for the deal to close.

I also think there will be selling pressure on CWB for the next two weeks as investors may be inclined to sell CWB in anticipation of the June 25 change in capital gains inclusion rates.

Thank you

Q: Hi 5i, for better growth over the next 3-5 years would a switch from to TD to CWB, so as to take advantage of discount, make sense? I'm worried about TD being put in the penalty box for any new US acquisitions.

Thx

Q: Are any of the other large Canadian Banks similarly exposed to investigation/prosecution in the U.S. for the same activity that TD was convicted? Also, can to tell me what % of each banks total business revenue comes from U.S. sources?

Q: JUst getting back to your answer yesterday about why NA dropped $6 on June 11. Not sure I agree with your assessment that it has nothing to do with the announcement of purchase of CWB. If CWB is NOT the culprit than what is please?

Q: Hi, I’ve always wondered and wanted to ask how and who makes the 68% return at the open today on CWB? It closed yesterday at 24.89 and opened 9:30 this morning at 42.65. Thanks.

Q: CWB up quite a bit today on the news of National's attempt to purchase. Up 70% but if I'm not mistaken there is still 40% on the table. { Please correct me if I am wrong about that 40% } Pundits on the Business channel have been commenting this morning and the consensus seems to be the government is unlikely to quash the deal ..... 40% is a nice arb play if the odds look good. Mind you if it doesn't go through there would likely be a nasty drop ...... What says 5i ? Do you like the arb play here on a risk reward basis ?

Q: As the NA price drops due to its offer to buy CWB is it a buy at this point or better to wait to settle the dust. Also, do you expect issuance of one billion new equity will offer at a lower price than current market price or it may dampen share price further?

Q: Hi, sorry if this was answered already. Any comments on the Globe and Mail report that National Bank offered to buy Canadian Western Bank in a deal valued at $5-billion?
Thank you, Michael

Q: The most recent question I found on USB was August last year. What is your current opinion on USB? Can you compare it to Visa for total possible return over a 5 year period? I presently hold no US financials.
Thank you.

Q: Which bank would you prefer - Royal or National and why?
THank you
Margaret

Q: Hi 5I. My largest holding is TD and I am going to reduce it by a third. Reasons are mainly concerns of future US growth because of the money-laundering stain. The potential fine is not as concerning as being shunned by investors resulting in stunted growth in the US. With the proceeds I was thinking of adding to my RY holding and taking a position in IFC. Or should I be looking at another big 6 such as NA or ...? Thanks in advance.

Carl

Q: Hello,

What are your recommendations for Canadian banks for a TFSA with a 15+ year horizon?

Q: In comparing total returns of the respective banks from Pre-Covid and then from Mar 16 2020 to present why does 5i continually endorse BNS - is it simply the DY ?

Q: What's the story here?...banks stocks don't go ballistic....