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Old 05-21-2020, 10:20 AM   #981
Samonadreau
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I was looking at the banks...why do you prefer TD and RBC to BNS/BMO/CIBC?

Thanks!
Good question, for me banks need to be forward thinking, Everything will be done online soon. TD is forward thinking and has the best online App out there. RBC ive just held forever and has consistent growth. BNS is intriguing with their affiliation with tangerine. CIBC has the highest dividend, but Im wondering how many baby boomers will be cashing out of that in the near future.

There's a paradigm shift right now to online banking and its reshaping the banking and financial sector.

Thats just how my brain works.

Doesnt hurt to be diversified. Pick a couple.

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Old 05-21-2020, 10:36 AM   #982
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I hold TD and BNS. I have held BNS for about 20 years. I like the diversity if BNS into different countries. TD has also been a core holding as I like the conservative approach to lending. I think all of the big banks have an argument for being held. In the past I held CIBC and RBC as well but sold those positions because I thought it was overkill for that sector.
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Old 05-26-2020, 07:58 AM   #983
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I bought some BNS on Monday morning at 51.46 in my TFSA, the plan is to hold it for a long time to collect the dividends and watch it rise back to pre covid numbers in the next couple years.
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Old 05-26-2020, 08:28 AM   #984
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So randomly while looking at another stock, Yahoo recommended I look at Cineplex, and wow something is confusing me there. They have a deal to sell at $34/share, but the stock is trading at 12.80. The buyer has reaffirmed this month they are going through with the transaction, shareholders have approved, they are just waiting on the Canadian government to approve, and locally the film associations seem to only want restrictions put on the purchaser to invest in Canadian produced content.

Other then people not paying attention, and looking at the fact that they are shut down, why is this stock so low? It's confusing me, shouldn't it be just below $34 like most buyouts that are this far along?
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Old 05-26-2020, 08:43 AM   #985
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So randomly while looking at another stock, Yahoo recommended I look at Cineplex, and wow something is confusing me there. They have a deal to sell at $34/share, but the stock is trading at 12.80. The buyer has reaffirmed this month they are going through with the transaction, shareholders have approved, they are just waiting on the Canadian government to approve, and locally the film associations seem to only want restrictions put on the purchaser to invest in Canadian produced content.

Other then people not paying attention, and looking at the fact that they are shut down, why is this stock so low? It's confusing me, shouldn't it be just below $34 like most buyouts that are this far along?
Well yeah, and I don't disagree. But there are a couple factors. One is that this deal needs approval under the Investment Canada Act (which is supposed to happen June 1st). That's a binary outcome, and a lot of investors hate them. Then you have Covid and that causes a particular concern for Cineplex in that they have debt covenants on the deal.

So, if Cineplex exceeds the covenant, the deal is over. I have zero doubt that they'll do everything possible to stay under and frankly in doing the math I think they're under. So, take that FWIW. I also think that the Investment Canada issue shouldn't be a factor because no one thought that it was much of an issue in February, but there are some people who do want this blocked. So, that's a tougher one.

And in all honesty, while this could go at $34, you have a special situation here. It's approved by shareholders at $34 to be closed by June 30. But obviously, if you're Cineworld you're coming back and trying to get a better price, right? And if you're Cineplex you're telling them to pound sand, we've got a done deal. At the same time, the share price isn't saying that this is a done deal and the market clearly doesn't think that $34 is going to happen. The deal is over $2bn and the current market cap is ~$770m. All this adds up to a couple things (purely IMO):

A) The first hurdle is approval from the government on June 1.
B) Assuming that clears, the deal could well be renegotiated, and pushed back from June 30th and at a different price.
C) The debt covenant should be OK. It's not great, but they should be under and you have to know that they'll not want to be the reason that the deal fails.

To properly value this as an investor, you have to look at how likely you think that this is to actually close, the value it closes at and that is one factor. Then consider the value of Cineplex if the deal doesn't close. Say Cineworld walks...or approval doesn't come. What's the value in that event? And lastly, what's the value of a modified deal look like?
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Old 05-26-2020, 09:51 AM   #986
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Well yeah, and I don't disagree. But there are a couple factors. One is that this deal needs approval under the Investment Canada Act (which is supposed to happen June 1st). That's a binary outcome, and a lot of investors hate them. Then you have Covid and that causes a particular concern for Cineplex in that they have debt covenants on the deal.

So, if Cineplex exceeds the covenant, the deal is over. I have zero doubt that they'll do everything possible to stay under and frankly in doing the math I think they're under. So, take that FWIW. I also think that the Investment Canada issue shouldn't be a factor because no one thought that it was much of an issue in February, but there are some people who do want this blocked. So, that's a tougher one.

And in all honesty, while this could go at $34, you have a special situation here. It's approved by shareholders at $34 to be closed by June 30. But obviously, if you're Cineworld you're coming back and trying to get a better price, right? And if you're Cineplex you're telling them to pound sand, we've got a done deal. At the same time, the share price isn't saying that this is a done deal and the market clearly doesn't think that $34 is going to happen. The deal is over $2bn and the current market cap is ~$770m. All this adds up to a couple things (purely IMO):

A) The first hurdle is approval from the government on June 1.
B) Assuming that clears, the deal could well be renegotiated, and pushed back from June 30th and at a different price.
C) The debt covenant should be OK. It's not great, but they should be under and you have to know that they'll not want to be the reason that the deal fails.

To properly value this as an investor, you have to look at how likely you think that this is to actually close, the value it closes at and that is one factor. Then consider the value of Cineplex if the deal doesn't close. Say Cineworld walks...or approval doesn't come. What's the value in that event? And lastly, what's the value of a modified deal look like?
Thank you for the write-up, that was a great bit of information and along the lines, I was thinking (though clearly my ability to analyze this is nowhere near yours ). The talking points from Cineworld seems to point to them just wanting it close the deal fast, so modifying it would seem counterproductive to their public goals.

I bought some call options this morning, as it seems like a solid investment, even if they don't get $34, and approval probably would see some really positive moment, especially in this crazy market.
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Old 05-28-2020, 10:55 AM   #987
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To add into Slava's analysis:

The break fees in the deal are interesting too.

Cineworld would have to pay $50MM to Cineplex, this in and of itself isn't that remarkable, and pretty small in the scheme of things.

However, there is an additional break fee of $50MM that would be paid by the Majority Shareholder of Cineworld. The majority shareholder is the Greidinger family. The Co-CEOs of Cineworld are Moshe and Israel Greidinger.

So, there is a personal break fee for the CEOs of Cineworld.

Also interesting of note today is that Cineworld has obtained covenant relief for their June covenant test, and a waiver of up to 9x D/E until the end of 2020.
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Old 06-01-2020, 10:15 AM   #988
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Question for all the options experts here,

If a company is being bought out at the end of June, and there are options available for July (and onward). What would happen to the options if the transaction goes through and the options are in the money (based on the sell price)? Do the options get executed early?

(I'm with Questtrade if that matters)
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Old 06-01-2020, 11:18 AM   #989
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OK, the answer to this is a tiny bit nebulous. So if the company is purely bought out (cash deal), the broker will almost certainly exercise and pay you the cash. After the company is bought out, the company ceases to exist, so you can't trade the options any more. If the options aren't in the money, they expire with no value.

If the company is having shares issued as the payment, or a new company is being formed and you have options that expire in the future, you could receive options on those shares. To be honest...I haven't dealt with this personally, so I can't tell you that first hand. I'm mostly not interested in shares of another company personally (or I would have bought them the first time around!).

Anyway...if the options are in the money, most dealers exercise them for you on expiry. That probably answers all you need. If you were concerned though, you could also sell the options before that date.

One other consideration, in case it applies, is that this might constitute more than one transaction if you exercise. You buy the shares (for the exercise price) and sell the shares (for the market price). I have no idea how Questrade does things, but you might pay two commissions here. If you sell the options you probably only pay one (but might not quite get the same profit...so you need to do the math).
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Old 06-02-2020, 06:17 AM   #990
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Just looking for some help:

Does anyone know of an app or direct investing bank that has good alerts? Doesn’t necessarily have to be real time although it would be nice.

I’d like to buy a stock, set it, and forget it. I don’t want to turn into a screen zombie checking the status of my stock every hour.

Does anyone know if rbc or td has good alerts? What app do you guys use?

Doesn’t have to be complex. Basic is fine.
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Old 06-02-2020, 06:19 AM   #991
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Just looking for some help:



Does anyone know of an app or direct investing bank that has good alerts? Doesn’t necessarily have to be real time although it would be nice.



I’d like to buy a stock, set it, and forget it. I don’t want to turn into a screen zombie checking the status of my stock every hour.



Does anyone know if rbc or td has good alerts? What app do you use for alerts?
I use alerts.google.com for tracking my stocks.


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Old 06-02-2020, 08:56 AM   #992
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Just looking for some help:

Does anyone know of an app or direct investing bank that has good alerts? Doesn’t necessarily have to be real time although it would be nice.

I’d like to buy a stock, set it, and forget it. I don’t want to turn into a screen zombie checking the status of my stock every hour.

Does anyone know if rbc or td has good alerts? What app do you guys use?

Doesn’t have to be complex. Basic is fine.
Yeah basically I just invest thru my bank, which has good interface for desktop but pretty crappy for mobile.

Any time I add/change/delete a position in my real portfolio, I set up the same thing in the Investing.com app and set up alerts accordingly. There are many apps out there, I'm not even sure if Investing.com app is the best one but it worked for me so I hung onto it.
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Old 06-04-2020, 05:54 PM   #993
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I haven't bought since the bear market began. If I was wise, I would have dollar cost averaged some money in by now. It's hard to know how much lower this thing goes. I personally believe we're not at the bottom yet.

I have felt exactly 0 motivation to sell. I have 25 years until retirement, the market will eventually go up again. Selling in bear markets is not a strategy I'd encourage (maybe this time really is different, but I doubt it)

I just hope that I have the confidence to fully take advantage of this great buying opportunity.

On the positive side, Mawer balanced fund has held up pretty well for me during this bear market. I was I could say the same about some index ETFs I own.
My post from April 15th is right on the money. Too bad I didn't dollar cost average as much as I should have into the market.
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Old 06-04-2020, 08:08 PM   #994
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My completely amateur opinion is that there really isn't a lot of great deals out there right now, unless you like to play the speculative stuff.

If you're 10plus years long in the market some of the better deals are the big 5 or 6 Canadian banks. I don't think they'll be slashing their dividends and aside from a little jump from Royal they're all kind of reflecting the forward looking depressed economy.

I'm sure there's some more flashy stuff out there though.

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Old 06-04-2020, 09:44 PM   #995
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Yup, this is about as overvaluated as the stock market has ever been. gonna be an interesting next couple years when the hangover hits.
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Old 06-04-2020, 09:54 PM   #996
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Yup, this is about as overvaluated as the stock market has ever been. gonna be an interesting next couple years when the hangover hits.
When will it end though? Will value stocks come back over growth stocks? If Feds keep propping up markets with huge influxes of cash, how will it end?
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Old 06-05-2020, 07:27 AM   #997
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When will it end though? Will value stocks come back over growth stocks? If Feds keep propping up markets with huge influxes of cash, how will it end?
I dont know but markets look to be gaining huge again this am.
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Old 06-05-2020, 07:48 AM   #998
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I promised myself I would be thoroughly disgusted when the president started tweeting about the stock market again. However I thought it would just be revulsion at the gloating in the midst of 100k + dead covid patients. But honestly, I don't think I can stand the upcoming live press conference regarding the surprising jobs report and the wonderful rebounding economy and most of all the stock market within all time highs again. It's going to make me puke. For sure.
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Old 06-05-2020, 07:56 AM   #999
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This is 100% moral hazard.
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Old 06-05-2020, 08:56 AM   #1000
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On one hand, I'm glad I've stuck it out, and even put some money in, because my balance (on paper at least) is almost back to where it was in January. Revenue in my own business is down, so it helps to have something else propping things up a bit.

But on the other hand, I feel some guilt profiting off this house of cards. I understand the Central Banks need to prop up the markets to prevent a complete cratering, but it feels over-reaching ...as if the powers that be have decided that any decline is just not acceptable. At some point the party has to grind to a halt... I guess the big question is when? It doesn't seem like the central banks are stopping anytime soon. It's 100% moral hazard, but you have to roll with the tide while you can.

I have a feeling this whole situation is only going to exacerbate the gap between the haves and have-nots. Those who have the luxury of investing were given the ability to benefit from this...even if just to get a second chance at pulling their investments out. But people on the lower end of the spectrum, who are putting their money into the basics of life, they tend not to have the ability to take advantage. They will only see the ass-end of this thing.
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