Investment Q&A

Q: Jason Donville just released his Q3 newsletter:

http://www.donvillekent.com/pdf/DKAM-Newsletter-October2015.pdf

It's always a great read, but I thought your readers may be interested in what he has to say regarding CXR. Please note this is the last paragraph of a lengthy discussion in the newsletter:

"So, where to from here? CXR has completed its equity issue and its underlying businesses are strong. But we also know the company is carrying more debt than we would like. Going forward, we think the stock is still quite undervalued but the company will need to address its debt issue somewhere down the road. This could mean that the company raises more equity or puts itself up for sale. Regardless, at current valuations, I think the company is worth a lot more than $50 a share. On our numbers, CXR trades on 4.8x 2016 Cash Earnings and 1.1x BVPS, while earning a 24% ROE."

Q: With there sale of some Colorado properties today, what is your outlook on this company. Thank you for the great service.

Q: Mitel is up today, ostensibly on news that Eliott Management Corp has initiated a significant investment in MNW and combined with their holding in another similar company is urging the board, I think, to consider merging the two. (please correct me if I am wrong). This type of shareholder agitation is not new but I am wondering what to make of it. While not all cases will be the same, in general it seems to me that these types of action - whether it be calls for mergers, asset sell-offs, special dividends etc. are essentially a condemnation of current management since if these ideas are so good the management should have thought of them.

The market seems to like this latest move as the stock is way up but if it is such a good thing, why didn't the current management initiate it? Should we continue to have confidence in the current management or is someone like Elliott, who seem to have a good reputation, just a smart group that thought of something no one else did?

Your insight is greatly appreciated.

Paul F.

Q: Just a note re your previous reply on CXR. Canaccord's target revision is in US$ to US$55. There's also an article here: http://business.financialpost.com/investing/trading-desk/the-lights-are-dimming-for-specialty-pharma

Q: Would you speculate as to what small and med. oil company maybe available for M+A. Thanks Jim

Q: CXR getting crushed again. I have been selling PHM to buy more, but that has been a bad strategy so far. I thought I was high grading the acct with this move, but instead I have been suffering. Any new news on this disaster of a stock? Comments?

Q: Hi Guys,

I have a large loss with a Fairfax Financial preferred (FFH.PR.I).

I was thinking of selling it and then purchasing FFH.PR.G. I would be in almost the same position as if I kept the original preferred but I would have a large tax loss to use. I would lose 29 basis points on the new rate and the reset would be a couple of months earlier but I would gain on the selling of FFH.PR.I ($15 bid) and purchase of FFH.PR.G ($13.70 ask).

Your comments would be most appreciated on this move.

Regards
John

Q: Are we seeing early warning signs of more downside to the stock markets given some of the recent bank results. National and CIBC in Canada, HSBC and Deutche Bank come to mind.
If we can legitimately connect the dots between these banking numbers and some of the softer US data numbers and the decision to hold off on interest rate increases might lead one to look for more safe havens if not head for the sidelines for a while.
I would appreciate your assessment of this environment.
Thanks.

Q: Hi Team,
Thoughts on dsg because I am debating adding to my position. However, could you recommend some companies with a strong balance sheet, preferably with low to no debt and that show a history of good use of capital. Are there any lesser followed/known companies that fits this criteria?
You guys still do an amazing job!

Q: Hi. I believe that CREIT is one of the more venerable and respected Canadian REITs. It has a beta of less than 0.3 which should useful in these volatile markets. It yields a respectable 4%. It is off approximately 20% from its high. It was upgraded this am. Can you comment on NAV, AFFO, and balance sheet/debt risk. It looks like a good buy here with a 10 to 20% total return over a year. UOM

Q: Hi there, please give me your opinion on the below allocations for Financials, Health Care, and Industrials:

Financials (18% weight)
BNS.TO, CSH.UN, EFN, FSZ.TO, MRC.TO, SLF.TO, TCN.TO

Health Care (9% weight)
CPH.TO, CXR.TO, GUD.TO, PHM.V

Industrials (11% Weight)
DRT.TO, LGT.B, NFI.TO, PUR.TO, STN.TO, WSP.TO

To me its a solid bunch of companies but I need to trim this list (or perhaps remove and add others) but am having a hard time - looking for your opinion.

Thanks!

Q: Dear 5i
I'm considering investing in the auto sector but am having a tough time deciding on which one of these three ...mg , lnr or xtc . I currently own bos and will likely be topping up it shortly but I wasn't sure if it belonged to the same sector . Acq is also down significantly and thought this might be the the time for a half position as well . Which of these stocks would you favour at this time ?
Thanks
Bill C.

Q: I would appreciate your comments on Colabor's latest results. What do you think about taking a small position at this time?

Thank you!

Q: I own the following stocks and I'm interested in the security of capital and income. I'd like to cull the 5 weakest. Which would you choose? Thanks for the ongoing help.

ET POW CSH SIA AD ISV CHE SPB ZWB ECI VNR

TMA FSZ SLF FCR HSE IPL GH ZPR

Q: It seems that the company had excellent results posted with earnings of 8 cents per share. Do you like these results and what do you think about the possible stock reaction tomorrow

Q: I am starting a new position in either AX.UN or AX.PR.G. It would seem the distribution is safer with the preferred, but there's more upside in the actual unit price of AX.UN. Is this accurate? Of the two, which one would you pick?

Q: I am nearing retirement and would like to sell some stocks and purchase a 1 to 5 year bond ladder. But, a bond ladder can be difficult to manage for a retail investor. Can you recommend a good 1 to 5 year bond ladder ETF? Will a bond ladder ETF actually perform like a bond ladder, where every bond is held to maturity or would it be more subject to capital gains and losses with fluctuating interest rates? Would I be better off with a 5 year GIC ladder at today's rates?
Thanks,

Q: How come no railroads in your equity portfolio? CNR and CP look a little better with the recent price correction and some seasonal strength coming. What's your thoughts on CN Rail value and share price upside?

Q: Interesting in your view of CDN banks? Are you seeing value? They are looking like decent value to me and going into some seasonal strength. BMO has been under the radar a bit but appears to have some upside with the new purchase etc. What's your opinion on BMO?

Q: In reviewing the growth portfolio the biggest winners are kinaxis and tucows. On your theory of averaging up not down if not owned would these be the two to buy or go with the few showing a small profit ie dhx media and element financial or any other that you woukd prefer at this time.