[Spidey]

I thought it would be interesting and hopefully informative to start a new thread to pass on what we are buying. It would be a little more helpful if you would also provide a bit of the buy story (even if it's just a "hot tip" from a friend.).

To start off, here are a couple that I've just purchased.

Futuremed Healthcare (FMD.UN) - They are the largest provider of nursing supplies, medical supplies and equipment to nursing homes in Canada. I figure this has be a growing industry and somewhat recession proof. Provides a 9.3% dividend. P/E 13.7 P/B 1.2

Interpipelines (IPL.UN) - Utilities seem to be a conservative bet and somewhat recession resistant play in this environment. Provides a 8.1% dividend. P/E 10.6, P/B 1.9

 

[HaroldCrump]

I recently bought YPG Holdings Inc. 7.3% 2/2/2015
Will be adding to my existing position in TRP within TFSA this month, hopefully @ $35 or less.
Bought the same last year same time at around $30, but no such deal around this time )

Eyeing several other stocks including CPD, XRE and FTS however, none of them within my expected price range.

Come to think of it, not much out there to buy among the well-known names.

Spidey, I assume both of your buys are income trusts.
Do you have any concerns around their upcoming conversions?
Do you believe a distribution cut is already built into the pricing?

 

[Berubeland]

I buy warrants. For those who don't know warrants are the right to buy a stock at a given price for a given amount of time.

For example I just bought some warrants for Canadian Western Bank. This particular warrant gives me the right to buy a Canadian western Bank share for 14$ until 2014. CWB is currently trading at $20.79 and the warrant at $7.16. So the warrant in this case is trading at a premium of 0.37. If you don't understand this don't worry warrants are usually traded by banks and most people don't understand them.

I have a small amount of capital to work with. To buy CWB I would have to have a minimum of 2079$. I would have 100 shares but I just bought 300 warrants for the same amount. The warrant tracks the share price if the price goes up on the stock the warrant also goes up. So I will get 3 times the appreciation as someone who buys the share.

I also often buy warrants that trade at much lower prices. I just bought 225000 OSU.WT at .005 which is the cheapest a share can go. Then I immediately put them on a GTC for .01 which doubles my money. Then I go about my regular job and wait for email alerts. The biggest problem is not getting excited or urgent about anything and buy low and sell when it goes up even a few cents.

When I started investing I tried to buy good companies and lost my shirt. Now I buy what has no choice but go up. I buy lots of shares and if It goes up even one penny I make a really good return.

Right now I have buy orders in for .005 for CCJ.WT, EMC.WT, and CEK.WT

Remember what I said about banks buying warrants? Well banks buy in large lots and sell in large lots. So when they want to sell I am sitting there waiting to buy and when they want to sell I am waiting to sell. In that way I am market making more than trading.

So yeah that's what I do/trade.

If you want more info.... www.canadianwarrants.com has all the warrants listed and is a great place to start.

 

[ssimps]

I've bought some bond funds, CLF, CBO, and CAB (when it was low 19 range). I'm treating CAB as an experiment.

I want to buy some D.UN, but given the price has jumped like crazy I am waiting, even if they are still at 10% yield.

Other than that, I have sold some stuff; which opens up the other side of the question; what are you selling?

I have sold YLO.UN not because I made any cap. gains (maybe 1%), other than the 15% yield they are paying, buy because I thought my position was too large with them; i.e. I had gotten greedy because of the 15% yield and I have no idea what will happen to them year end in terms of yield.

I have also sold some CYH for the 28% capital gain.

So I've been mostly sitting on the fence the last couple months, waiting and hoping for a bit of a correction.

 

[Dr_V]

A reasonably large portion of my portfolio is sitting in cash at the moment. Still trying to decide; there aren't that many good deals that would nicely complement my portfolio at this time, so I'm on the sidelines waiting for some nice opportunities.

 

[Toronto.gal]

Will be adding to my existing position in TRP within TFSA this month, hopefully @ $35 or less.

TRP is at $35.15 right now, so I'm getting some too. Got rival ENB at $41 in November and now is trading at $47.

Canadian: Bombardier, Canadian National Railway, Goldcorp, Magna, Suncor + banks.

American: Took a chance on Ford & Citigroup at $9 and $3 respectively. Intel & JNJ.

Any thoughts on:

Potash Corp.
RIM
Tata Nano

Waiting for 4th quarter earnings.

Here are some thoughts from money manager of the decade.
http://www.theglobeandmail.com/glob...n-money-manager-of-the-decade/article1416065/

@Spidey: nice thread, thank you!
@Berubeland: thanks for the info. & link on warrants.

 

[Spidey]

Spidey, I assume both of your buys are income trusts.
Do you have any concerns around their upcoming conversions?
Do you believe a distribution cut is already built into the pricing?

Both picks have, pretty solid fundamentals. For example, I compared the ratios of IPL.UN to TRP (which I also own) and ENB and it stacks up fairly well.
I would guess, based on earnings, that FMD.UN may have a 30% dividend cut after the conversion and IPL.UN may be able to keep their current distribution or have a small cut. So yes, I believe that potential distribution cuts are already built in to the pricing.

 

[MoneyMaker]

Bought Gravity (GRVY) on the nasdaq, trading below its net net working capital

Biovail looks interesting as well, still spitting lots of good free cash flow

 

[CMFCanada]

Anyone still here?

Well just in case I am buying Slam Exploration - SXL.V on the venture exchange. They have great proven reserves in their Nash property. At current pricing the value is about 80 cents for just one property. They have several. Results are starting to come in. Few months ago share price was .04 cents. Yesterday it traded around .13 / .14 cents and currently sitting at .11 / .12 cents. The early birds will profit most. This company should be valued well over a dollar.

 

[Fain]

A commodity mutual Fund, Google, and SiriusXM

 

[John_Michaels]

For Capital Gains or 'couch potato'
Continuing to invest in Montrusco Bolton Cdn Small Cap fund, hoping past performance is indicative of future performance...
TD e-series for Can/US/International diversification

For specific Dividend income
One of my goals is dividend income for retirement (or not working) as thus targeting more of EMA/FTS/RY/TD/T/SJR/ENB/TRP/PWF/SLF/SU. No BMO/CIBC yet but maybe. First I have to figure out why I'm uncomfortable about these two and do I really need more finance stocks.

For my US stocks, just CL/ED/GE right now. I believe the CDN to the US is medium-term unsustainable (target is 0.8ish) and thus trying to figure out what to purchase given the tax treatment of dividends outside the RRSP. Perhaps just go with more ALGN.

I don't understand the implications of the Trust conversions nor Trusts in general I suppose so I have no plans to purchase these. While I do somewhat understand options/warrants, I just don't have the guts to invest with these.

For Fixed
No new bonds, no new GICs, just 1 year emergency fund in cash. I'm pretty much 80% equities and plan to increase that through normal purchases.

 

[CanadianCapitalist]

With stocks rocketing upwards since last March, my bond component is below target. So that's where new savings are heading. I use short-term bonds mostly through XSB. The 2.3% yield looks measly but the whole point of an asset-allocation driven investment policy is not to speculate on future direction of interest rates.

As an aside, I'm planning a post on this but thought I'd throw the idea out here as well. Anyone notice how REITs have bounced back and now seem fully valued? RioCan, for instance, is trading at $20 compared to a NAV estimate of $16.30 (according to TD Securities).

 

[Sampson]

As an aside, I'm planning a post on this but thought I'd throw the idea out here as well. Anyone notice how REITs have bounced back and now seem fully valued? RioCan, for instance, is trading at $20 compared to a NAV estimate of $16.30 (according to TD Securities).

I did notice this.

We upped our exposure earlier in the year, but not the full position, only 50% of what we needed to add for our allocation. What happened to the pending crash/correction in commercial real estate?

Seems not as many companies (non-RE) went under as we first thought. Access to capital for small-caps is much improved and no longer a serious, serious threat - maybe we did get over this thing after all?

 

[HaroldCrump]

Seems not as many companies (non-RE) went under as we first thought. Access to capital for small-caps is much improved and no longer a serious, serious threat - maybe we did get over this thing after all?

My guess is yield-chasing by retail and and perhaps institutional investors.
Since financial institutions have tradionally been the cornerstone of dividends and yields, but now in the aftermath of financial crisis, investors are turning to REITs for yields.
10, 15 and 20 year bond yields are low as well.

 

[ssimps]

My guess is yield-chasing by retail ... investors.

I think this is a big part of it. It is incredible; look at what D.UN has done in the last week alone, up up and away. Does this mean it will last; not sure about that one.

 

[ssimps]

my bond component is below target. So that's where new savings are heading. I use short-term bonds mostly through XSB.

Is there a reason you prefer XSB vs say CLF and CBO? Is is because XSB is a mix of gov and corp, and you would need to hold both claymore etfs to get the same thing?

Just wondering if you have a preference for one over the other and if so why, or if it is more a matter of just picking XSB vs other short term bond etf options?

What your thought on CAB given the claimed tax advantages it could have if these funds are outside RSP or TFSA?

Thanks!

 

[HaroldCrump]

Is there a reason you prefer XSB vs say CLF and CBO? Is is because XSB is a mix of gov and corp, and you would need to hold both claymore etfs to get the same thing?

Just wondering if you have a preference for one over the other and if so why, or if it is more a matter of just picking XSB vs other short term bond etf options?

I know you asked CC and I'm not answering on his behalf....
To me, those are different beasts.
You can't compare XSB with CLF+CBO
They represent different investment goals/strategies/philosophies.
CBO and CLF are bond ETFs that have built in laddering.
OTOH, XSB is purely a short term bond index (representing the DEX Short Term Bond Index).
The type of bonds and more importantly the durations of the types of bonds being held are different.

Someone buying XSB is most likely betting on an increasing interest rate environment where it pays to stay short (not a bad assumption these days anyway).
The risk level of XSB is also way lower than CBO.

What your thought on CAB given the claimed tax advantages it could have if these funds are outside RSP or TFSA?

Can you explain to my novice mind how exactly CBO works by using the futures contracts?
Are they holding futures contracts for bonds not yet issued?
How are they achieving capital gains for those bonds?

 

[ssimps]

You can't compare XSB with CLF+CBO
They represent different investment goals/strategies/philosophies.
CBO and CLF are bond ETFs that have built in laddering.
OTOH, XSB is purely a short term bond index (representing the DEX Short Term Bond Index).
The type of bonds and more importantly the durations of the types of bonds being held are different.

OK, I see that now. XSB holds bonds that are 1 - 5 years in length, so does the ones I mentioned.

Before reading more, please let me be clear that I am not saying the claymore stuff ios beeter than the ishares stuff; I am asking for objective input on which is better, if either, and if so why.

Someone buying XSB is most likely betting on an increasing interest rate environment where it pays to stay short (not a bad assumption these days anyway).

Is not that also the idea behind a laddered 1 - 5 year bong ETF like CBO or CLF too? XSB also holds 98% bonds 1-5 years and average bond duration is almost the same.

The risk level of XSB is also way lower than CBO.

Why is that? Is it because CBO holds only corp bonds but XSB holds both gov and corp? If so, that is why I asked about CLF and CBO. If there are other reasons why XSB is way lower risk, can you please explain.

4% or so of bonds in XSB are rated BBB, is that not risk?

Can you explain to my novice mind how exactly CBO works by using the futures contracts?
Are they holding futures contracts for bonds not yet issued?
How are they achieving capital gains for those bonds?

Do you mean how CAB works by using the futures contracts, or does CBO also?

Regardless, no I can not, thus why I am asking for input to my 'novice mind' too.

 

[HaroldCrump]

OK, I see that now. XSB holds bonds that are 1 - 5 years in length, so does the ones I mentioned.

Yes, but XSB doesn't have laddering built into it like CLB and CBO do.

Before reading more, please let me be clear that I am not saying the claymore stuff ios beeter than the ishares stuff; I am asking for objective input on which is better, if either, and if so why.

Right, I understand your question.
I believe they serve different purposes.
CLB & CBO are automatically laddered. XSB is not.
With XSB, the investor is always going short term.
IOW, the investor is either minimizing interest rate risk and/or expecting interest rates to rise in the near future.

Is not that also the idea behind a laddered 1 - 5 year bong ETF like CBO or CLF too? XSB also holds 98% bonds 1-5 years and average bond duration is almost the same.

But XSB is not automatically laddered.
What I don't understand about CLB and CBO is why they are not using zero coupon bonds for the laddering, but that's a different issue.

Why is that? Is it because CBO holds only corp bonds but XSB holds both gov and corp? If so, that is why I asked about CLF and CBO. If there are other reasons why XSB is way lower risk, can you please explain.
4% or so of bonds in XSB are rated BBB, is that not risk?

4% is a very low number and BBB is not junk bond status.
I don't know the % split of bond rating for CBO - do you know the split?
I couldn't find it on the Claymore site.

The other question about CBO and CLB is whether they are always buying 5 year term bonds and holding them to maturity or simply rolling over maturing bonds and buying bonds where the TTM is 5 years.
That makes a difference.
Again, no clear answer on the fund page - do you know?
Or maybe the answer is buried on page 154 of the prospectus ;o)

Do you mean how CAB works by using the futures contracts, or does CBO also?

I meant CAB.
I understand futures contracts, but what I don't understand is how CAB is using the futures contract for bonds to return you capital gains instead of distributions.
Are they buying and selling bond contracts for bonds that haven't yet been issued?
Or are they put options for bonds?
What happens when interest rates rise and the prices of their futures contracts fall?

Regardless, no I can not, thus why I am asking for input to my 'novice mind' too.

I would like to know as well.
XSB I understand, CLB and CBO to some degree (except for their roll over strategy) but CAB I don't.

 

[CanadianCapitalist]

I know you asked CC and I'm not answering on his behalf....
To me, those are different beasts.
You can't compare XSB with CLF+CBO
They represent different investment goals/strategies/philosophies.
CBO and CLF are bond ETFs that have built in laddering.
OTOH, XSB is purely a short term bond index (representing the DEX Short Term Bond Index).
The type of bonds and more importantly the durations of the types of bonds being held are different.

Someone buying XSB is most likely betting on an increasing interest rate environment where it pays to stay short (not a bad assumption these days anyway).
The risk level of XSB is also way lower than CBO.
Can you explain to my novice mind how exactly CBO works by using the futures contracts?
Are they holding futures contracts for bonds not yet issued?
How are they achieving capital gains for those bonds?

I don't understand why XSB is different just because it tracks a bond index. Actually XSB does not hold all the bonds in the index anyway. I uses a sampling to replicate the index as much as possible. XSB is roughly equivalent to 2/3rd CLF and 1/3rd CBO. A bond ladder is no different from a bond fund of the same duration and since CLF and CBO are rolling over their bonds, they are roughly the same as XSB.

I've been holding XSB long before Claymore introduced the ETFs. I haven't seen a compelling reason to switch from XSB considering you'll have to buy CLF and CBO. The risk-reward profile compares like this: CLF < XSB < CBO.

The reason I chose XSB instead of XBB has nothing to do with interest rate direction. Instead, I subscribe to the theory that investors do not earn enough returns to compensate them for the extra risk in going from a short-term to an intermediate-term bond fund. Instead, you can take the same risk in equities and expect higher returns than you could in longer-term bonds.