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| Marc-Andre Gaudreau of Natcan Investment Management |
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| TOP PICK | Goldman Sachs | GS-N | 107.490 | 4.1% due Nov 3/15. With what is happening in the market and that financials have under preformed a lot, this one is trading from the spread and almost back to where it was during the crisis. | 2011-09-16 | ||
| Comment | Rogers Communcations (B) | RCI.B-T | 37.220 | 2040 Bonds? There are lots of uncertainties over 30 years in the technology space. The good thing about them is that if you don’t intend to hold them to maturity, they are liquid and you can sell them into the market. For the long end of the curve, he prefers companies that could be protected so he can make sure he gets his coupons and capital back. | 2011-09-16 | ||
| TOP PICK | Royal Bank | RY-T | 46.300 | 3.18% due Nov 2/15. Financials under performing. (Subordinated, not the seniors.) Cdn banks have very strong footing. They have the option to roll over for another 5 years. | 2011-09-16 | ||
| DON'T BUY | George Weston Ltd. | WN-T | 66.090 | Preferreds. There are cheaper blue chips such as CIBC (CM-T). | 2011-09-16 | ||
| HOLD | Yellow Media Inc | YLO-T | 0.710 | Feb 2016 bonds. Safe? Trading in the low $70’s in the market so you’ve already lost a lot of money. Fundamentals of the business are not going well. Looking at the different aspects, they won’t run out of cash for the next few years. You might as well keep them. | 2011-09-16 | ||
| Comment | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Convertible bonds? Doesn’t own them in his portfolio but in a high yield portfolio there is a place for them. It is always to how much yield you are getting, not relative to being funded on a senior basis versus the value of your equity. Not liquid at all. | 2011-09-16 | ||
| Comment | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Why do brokers change the subject from absolute yield to “yield spread” over Treasuries? A bond will change in price with the “all in” yield. “All in” yield is comprised of “risk free” yield (government bond) and “credit premium” (the spread). If yields remain the same but government yields come down 1% and credit spread widen 1%, price will remain the same. | 2011-09-16 | ||
| Comment | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Ford Credit Canada 2015. Hold or Sell? Ford itself is doing the right thing to get back to investment grade. They will probably come back pretty soon. Still attractive from a safety standpoint. The only problem is if the economy is going into a double dip, they will under perform. He's buying through the US now because of the strong Cdn$. | 2011-09-16 | ||
| PAST TOP PICK | A Comment -- General Comments From an Expert | A Commentary | 0.020 | (A Top Pick Aug 19/10. Up 3.56%.) BMW Corp. 3.22% due 3/28/13 bond. | 2011-09-16 | ||
| PAST TOP PICK | A Comment -- General Comments From an Expert | A Commentary | 0.020 | (A Top Pick Aug 19/10. Up 10.12%.) CDP Financial 4.6% due July 2020. | 2011-09-16 | ||
| TOP PICK | Intact Financial | IFC-T | 53.210 | 6.4% due Nov 23/39. Largest P & C company in Canada. Very fragmented industry. Very strong underwriters. Recent acquisition makes the bond safe and attractive. | 2011-09-16 | ||
| PAST TOP PICK | Intact Financial | IFC-T | 53.210 | (A Top Pick Aug 19/10. Up 8.76%.) 6.4% 11/2039 bond. (Long term) | 2011-09-16 | ||
| Comment | iShares US High Yield Bond Index ETF | XHY-T | 20.050 | US High Yield Bond Index Fund. Performing poorly because of the credit risks in the uncertainties of the market. Default rates haven’t moved up yet but the market is pricing higher default rates down the road. | 2011-09-16 | ||
| BUY | Corus Entertainment (B) | CJR.B-T | 19.240 | 7.25% Feb/17 bonds. Good idea to trade lower grade bonds to minimize risk? These are junk (BB’s) bonds. Makes sense to trade down to pick up additional yield but you don’t want to get too far down the credit structure such as CCC’s. Pretty stable company. | 2010-08-19 | ||
| HOLD | Husky Energy | HSE-T | 25.030 | 2020 bond yielding just under 5%. Was this a mistake going this long? Canadian investors usually don't like buying bonds longer than 5 years because of fears of running out of reserves. He is comfortable with these bonds. | 2010-08-19 | ||
| Comment | Manulife Financial | MFC-T | 12.310 | 7.768% bond due 4/8/19? Risk currently is dilution. Doesn't see any default risk. Once company issues equity or reduces dividend there should be an improvement in these bonds. Fairly priced right now. Prefers buying lower dollar bonds. | 2010-08-19 | ||
| Comment | Toronto Dominion | TD-T | 70.150 | Capital Trust II bonds callable 12/31/2012 due 2025 with a 6.792 coupon rate. Likelihood of them being called on 12/31/2012? Very high probability as banks have always called them even during a crisis. Banks are over capitalized right now. | 2010-08-19 | ||
| TOP PICK | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Top Picks include 3 bonds, short term, medium term and long term. BMW Corp. 3.22% due 3/28/13 bond. (Short Term) Company has a very good product offering. Improving margins. Weak euro favours them. | 2010-08-19 | ||
| TOP PICK | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Top Picks include 3 bonds, short term, medium term and long term. CDP Financial 4.6% due July 2020. (Medium Term) Carries the largest pension fund in Canada. | 2010-08-19 | ||
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| Comment | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Medium term Canada Housing Trust bonds? As an alternative to government bonds, it makes sense from a credit risk standpoint. From a valuation standpoint they would prefer provincials, which gives a higher premium and the credit risk is very limited. | 2010-08-19 | ||
| TOP PICK | Intact Financial | IFC-T | 44.660 | Top Picks include 3 bonds, short term, medium term and long term. 6.4% 11/2039 bond. (Long term) This is a company that he feels comfortable with. Have good traction and are gaining market share. | 2010-08-19 | ||
| BUY | iShares Cdn Corp Bond ETF | XCB-T | 20.830 | Canadian corporate bond ETF. Individual investors need to have a diversified portfolio and ETF’s are a good way to go as they have lower management fees. | 2010-08-19 | ||
| BUY | Claymore 1-5 yr Ladder Corp Bond ETF | CBO-T | 20.660 | 1-5 yr Ladder Corp Bond ETF. Individual investors need to have a diversified portfolio and ETF’s are a good way to go as they have lower management fees. | 2010-08-19 | ||
| BUY | HAP Corporate Bond ETF | HAB-T | 10.290 | Corporate Bond ETF. Individual investors need to have a diversified portfolio and ETF’s are a good way to go as they have lower management fees. | 2010-08-19 |
