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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: I have a question about CGI, which I've held since 2013, so I've done very well with them, but they don't have a dividend policy, so I'm feeling that the capital gain that I have is being lazy and not working for me without any divvy income to offset. If I was going to sell half, what would you suggest would be a good 3 to 5 year replacement to consider? I tend to favour medium to large caps, and mostly dividend payers. I also have Open Text and Syzlogist as other tech holdings, in a fairly diversified portfolio that includes international and US etf's. I currently do not have any resource/energy (I was thinking Vermillion) or consumer (I was thinking Loblaws or Metro, Dollarama looks expensive still)holdings.

thank you,
Read Answer Asked by g on August 02, 2018
Q: Good morning Peter n your wonderful team,
I sold my J&J shares recently due to the outstanding lawsuits against the company, I think of replacing it with Pfizer. What is your opinion on future of Pfizer’s earnings, growth n dividends, cash flow, pipelines of drugs, balance sheet etc. Or can you please suggest one or two drug companies that will provide some growth plus dividend income?

Thank again for your insight! Asked by Rossana.
Read Answer Asked by Rossana on August 02, 2018
Q: West Fraser Timer and Interfor have both been highly volatile for some time, presumably due to tariff fears. I was not concerned with the declines as long as they recovered. However, both have now plunged significantly and are not showing signs of bouncing back. Is there anything to be overly concerned about here?
Read Answer Asked by Gordon on August 02, 2018
Q: I now have roughly equal positions in IAG, SLF and MFC, with the total somewhere between 8 and 9 % of portfolio. I bought these primarily for the dividends. However, MFC has lost value relative to SLF - and IAG has lost even more. Why are MFC and IAG underperforming SLF to such a degree? Thanks.
Read Answer Asked by Gordon on August 02, 2018
Q: I was lucky enough to load up on this last week. My largest holding. On the TSX I see the market cap as of yesterday's close ~ $165 million for QTRH.TO. They were awarded ~$188 million CAD today in their lawsuit against Apple. To me, this should be up over 100% tomorrow just based on that. Im sure the market will also give a higher value to current cases and other patents now also. Shorts will also get destroyed. Thoughts? Anything I'm missing? Also, may I please have your longer term views of the company. Thank you.
Read Answer Asked by Manoj on August 02, 2018
Q: Hi 5i team :
I want to know how resilient is my portfolio to a downturn of the TSX. Can I use the beta value for each stock ?, is this a correct method ?. If so , where can I find the beta values ?, Some brokerages show a value (i.e. tdwaterhouse) . is this value reliable ?, how is the value calculated ?. Thanks for your help
Read Answer Asked by Alejandro (Alex) on August 02, 2018
Q: Hello 5i,
Sorry for another ECI/BIP question, but the questions to date that I have seen haven't addressed my question.
Given the dividend that ECI currently pays out of cash flow, and that BIP will ultimately receive that cash flow, and the nature of the funding, might it be reasonable to expect that BIP would increase their dividend in one of the first two quarters of 2019? Or, would their acquisition make debt re-payment a priority do you think?
Obviously, I know you cannot read the minds of BIP's Board and Executive team, but given their financial ratios, I though you might have some insight.
Thanks!!
Cheers,
Mike
Read Answer Asked by Mike on August 01, 2018
Q: Hi 5i,
Just a comment in relation to BIP.UN’s buy-out of ECI. I have held both of the securities for a number of years. ECI shareholders who have not previously held BIP.UN should take a careful look at it to determine if it is appropriate for their needs. ECI pays a fully eligible Canadian dividend on a monthly basis at a higher yield, relative to the recent past price range of ECI. It may be that the takeover premium makes BIP’s yield higher but only by dramatically lowering ECI’s. In contrast, BIP pays a quarterly distribution that is not an eligible dividend, is broken into three categories for tax purposes, and is paid in $US. Depending on one’s brokerage account set-up, some people may find that they are paying a currency transaction fee on each BIP distribution. It is important to be sure that BIP is really the kind of vehicle one wants to own. I hold BIP in an RSP account and it works well for me in that context but I would probably not want to have it in another kind of account. In regard to tendering to the cash and shares offer, people may want to consider how many BIP shares they would expect to end up with. If one’s ECI holding is relatively modest in the first place and one is likely to receive only 25% or less of the value in shares, a person could end up with a BIP holding that 5i would advise selling as “too small to have a meaningful impact on the portfolio.” If that is the case, it may be better to go for all cash (or sell it all at once in the meantime) and avoid paying a transaction fee later on an unnecessary tag end.
Cheers!
Read Answer Asked by Lance on August 01, 2018
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