February 25, 2016 11 am eastern time

Stantec is down 3.8% after releasing Q4 earnings that were down 33% mostly due to lower oil and gas and mining activities. Stantec is an exceptionally well managed company and will continue to grow. I would be comfortable adding to my position.

Stantec released earnings before the opening. I would prefer companies to release after the close to allow more time for analyst to digest the news and for the price to more fully adjust at the opening. But at least companies no longer release during the trading day, which is a completely unfair process. Some years ago I complained to the regulator and the TSX about that and my complains were part and perhaps the largest part of the reason the practice was stopped. My (insincere) apologies to Board members who must now assemble at 6 am or whatever.

Royal Bank has issued a new rate reset preferred share at 5.5%. The reset will be 4.80% above the five year Canada bond yield in five years. (Of course if that is a juicy and attractive yield at that time then the bank can redeem these shares at $25). You can see why existing rate reset shares that are due to reset at more like 2.5% (it varies) over the 5 year bank of Canada yield are now at a disadvantage in the market and therefore trade at steep discounts. The good news (for those buying at the discounted price) is that there is a chance that market yields will change and these discounted preferred will move back towards $25 or like in the RioCan situation could possibly be redeemed at $25 (though I would not count on that). In the case of the Royal Bank preferred shares they are subject to being converted to common shares if the bank runs into trouble. That is always possible given the high leverage of banks but nevertheless is unlikely. And you would still get $25 worth of common shares. I would be comfortable buying these new Royal Bank referred shares as part of a portfolio. However, being short on cash and given other opportunities, I will not be buying.