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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: The new version of rate re-set Preferreds with a re-set floor seems to have found favour with investors. A quick survey of such recent issues finds them all trading in excess of $25.00 par issue price.
What are your general thoughts?
Can we expect all future issues to include this floor feature?
Might future isssuances not be quite as generous given the apparent demand?
While not true fixed income - they now seem closer(?) ; and yields are attractive.
Considerations / Thoughts?

Thank-you
Read Answer Asked by William on July 18, 2016
Q: I have been dabbling with momentum investing recently after reading endorsements of a 70% value 30% momentum approach. I haven't been able to find too many concrete details on momentum process, mostly vagaries. So far, I have been keeping things simple - buying names with reasonably good fundamentals and strong momentum over the last 6 or so months and riding the momentum until 10 day SMA crosses below 30 SMA. The results have been mixed so far, I reckon I've come out about even. Does this approach seem more or less sound based on your experience? Are there other details you might include in the process (i.e. absolute loss limit in addition to SMA trigger)? Finally, how to stick to the process when markets are in a down trend (i.e. very few stocks have good performance in last 6 months) -- I assume it's important to stick with the process to catch momentum when it turns.
Read Answer Asked by JONAS on July 18, 2016
Q: Re Pegi and Peg here in Canada - it appears they are a US based company listed here in Canada - the 2015 and 2016 "dividends" were considered non-taxable return of capital for US tax purposes (per info from the company website). Would you or any reader know what the tax treatment would be for Canadian tax purposes of a US ROC distribution?
Read Answer Asked by Ed on July 18, 2016
Q: CXR has lots of headwinds (brexit, pricing environment, debt levels, questions about their business model, etc). if debt level is one of the biggest headwinds the company faces, and current cash flow will take years to pay down debt, is it possible the company issues shares, even at this really reduced price, to pay down debt?
Read Answer Asked by Richard on July 18, 2016
Q: Hello, I was looking at entering a position in Terra Nitrogen Co (TNH) which produces nitrogen fertilizer products. It has a pretty good dividend and seems to be very undervalued. Also it seems to excel across most metrics (ROIC, ROA, etc).

A few reservations is that the gross margin is slowly decreasing over the past 5 years and that it is a master limited partnership. Is this different tax wise if I buy this through my RRSP account?

I already hold Agrium and wanted to also get into TNH for the dividend and valuation.

Your thoughts would be greatly appreciated.

Andrew
Read Answer Asked by Andrew on July 18, 2016
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