Investment Q&A

Q: Hi 5i guys. Back in OCT or Nov when Linamar was stuck in the low $70 range I sold a long dated call on LNR at $80 strike price since I didn't think LNR was going to move in price very much and I thought I would collect some premiums. Well LNR has been well over $80 for a couple of weeks and the option still has not been exercised and I still have my 100 shares of LNR. This seems odd to me since I figured that the counter party to this option would have exercised their option to take the LNR shares. Is there a logical reason why this option is still outstanding. I am not disappointed with my call selling strategy since I got over $3 of premium so I am flat since LNR has been trading around $84.

Q: LNR and MG have performed about the same since their lows in April. I own LNR and am up 60%. Would you consider owning both or does one have an advantage right now over the other?

Thanks for all your help, Mike

Q: Hello,

Could you shed any light behind Magna's 7% and Linamar's 5.5% drop this past week?

Thank you

Q: I have held MG in a non reg account and watched it drop and drop. I recently did a tax loss sale and exchanged for LNR, which has somehow rebounded almost 50% in a few months. However…the Canadian car parts sector is as volatile as ever. Is it worth exiting the sector? Any crystal ball suggestions at this time as to what I should do? I am inclined to exit the sector for brighter skies in a less volatile sector.
Even if they keep some business with margins, ie US factories, there is so much risk of sunk costs in process.

Q: What is your current view of the big three Canadian auto parts manufacturers. Are they buyable? Are you discounting tariff concerns yet? Which would be your pick?
thanks, Hugh

Q: Hello,

Could you share some insight on why Linamar stock is substantially higher in the past month than Magna? (20% vs 7%)

Thank you

Q: Hello Team,

I read your comments regarding Magna and your decision to downgrade it to a sell for the obvious trade war reason but also other ones. Do you place LNR in the same basket?

During these difficult times for Canada and our leading companies I appreciate your insight more than ever.

Thank you,
Adel.

Q: In light of the tariffs, what should I do if I hold shares of LNR. Is there hope of recovery or should they be sold? Thank you.

Q: With 'be greedy when others are fearful' in mind which of Magna, Linamar and Martinrea are the best bargain right now?

Q: please comment on year end numbers. Thanks.

Q: I believe Trump is bluffing about tariffs on Canada, especially tariffs on auto industry.
Even if enacted, they will be removed shortly.
What companies ie stocks would you see as especially poised to move up?
Please list them from most upside potential to least, please add others if applicable

Q: Presuming that the price of steel goes up with tariffs, outside of the steel industry itself, what sectors and specific companies lose out here? Thank-you.

Q: Good morning - can you give us a sense as to what Cdn companies (say 10) that would be most adversely affected by a tariff war with the US? Many thanks as always.

Q: Your thoughts on earnings and guidance please. Is this falling into a value trap that at least on analyst has suggested?

Q: A member's question regarding CAD companies that would be most negatively affected by the effect of a Trump victory on Canadian co's with large exposure to the US highlighted the list I included above. I can possibly understand why LNR and MG would be negatively affected, but why should Canadian oil producers (and a pipeline co which doesn't compete with a US pipeline Co's route) also be affected by a commodity covered by NAFTA 2 which was approved under the previous Trump administration?

Q: If Trump wins election and he follows through with his promised 20% tariff on imported goods, which Canadian industries would be most adversely affected?

Q: I have held Linamar shares for a number of years but am becoming somewhat frustrated by their performance. Shares trade at about the same price that they traded at in Oct 2020. Apparently investors just do not seem interested in the company. The recent quarter results seemed reasonable but the shares immediately went down $3. So, in today's market what would be your rationale for continuing to hold the shares, or is it time to sell and move elsewhere?

Q: The auto industry backdrop and Linamar. I can understand that the EV scene is mixed, perhaps at best; there are re-charging issues as well as some fire risk associated with Lithium, and that Chinese subsidized imports are a potential problem, but my reading was that our industries here, MG, LNR, and MRE, were largely agnostic to the potential EV problems. In addition my most recent related reading was that Linamar has diversified at least in part into agricultural machinery, which would be an addition to their initial skyjack venture, and that while the US Fed had postponed rate reductions the US economy continues to bubble along, albeit at a slightly lower rate than hoped, but is OK. So what have I missed? Is Lithium a bust? How serious are the range/ recharging/ fire issues? A PE of 5 or 6 is for the birds.

Q: Your thoughts on Q2 earnings, please. Sales appear to be a bit light.

Q: Sir:
In reviewing the trust holdings for Grandchildren, I noticed that these previous darlings of 5i are all on life support. So , going forward, what are your recommendations? Thanks- Jim