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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: I sold BDI at a sizable loss years ago and fully appreciate how extremely cyclical this companies earnings are, for good or bad. Waiting patiently for an opportunity to catch a high beta cyclical upswing in the companies earnings. Can you advice as to how to approach this investment thesis? Start building a position now even thought its early or wait till there is clearly an upswing in earnings while trying to avoid false starts? I cant help but think that after years of terrible government policy there is blood in the streets now.
Read Answer Asked by Joel on September 28, 2018
Q: In the answer to question asked by Richard you state that the 2019 EPS for SIS 2019 is 83 cents.
The company recently announced an estimate of $60M earnings for 2019 with less tha $50M shares outstanding, which is obviously a higher EPS than your est. Is this because the company is referring to EBITDA and you are referring to net earnings?
When we are shown the forward EPS on Morningstar etc..., are they referring to EBITDA or net earnings? Is it really only net earnings that matter? Please explain.
Thanks
John
Read Answer Asked by john on September 27, 2018
Q: Why are they hitting these 2 market darlings,TOY(especially today.Smell of poor Q to be announced on Nov 6?) & PBH recently.See no negative news.,,Are they affect by NAFTA as very likely that Trudeau will not signed by Sep 30 due to Quebec election on Oct 1.where Supply Management is highest.Please provide reasons for weakness.Is it time to start a position?Thank for U usual great services & views.
Read Answer Asked by Peter on September 27, 2018
Q: Hello,

Long time holder of PKI and SPB. In the past I have watched PKI bounce around and jump up in price and then back down because earnings were weather related (good or bad) and/or input related (ie. contract spreads). Now with the recent price increase (very happy) is it because of their move into convenience stores or is their underlying profit seen to be more "permanent" than "transitory"? Does SPB carry similar characteristics as PKI so that under the right circumstances, they could see a large price increase as well?

Thanks,

Robert
Read Answer Asked by Robert on September 27, 2018
Q: Hi 5i,
Toy has been sliding as of late. A guest on bnn yesterday has said that he blames "trade war" fears. Do you think that the current trade war fears, or tariffs that are happening right now will affect Toy in any meaningful manner? Or are investors selling off for no reason. I realize the old Toys R Us bankruptcy likely kept the stock sideways for a while. But now, that seems to be mostly behind us (is it not?) Leading up to holiday season I would have expected Toy to take another leg up here, especially after last earnings release was showing that they are still into record results despite Toys R Us. Is this setting up to be a great buying opp? Your opinion, thanks.
Read Answer Asked by Shane on September 27, 2018
Q: WRT your recent DHX report, I think it leaves out some significant assets: Cash, short term investments, and the Peanuts sale cash. Can you check these numbers:

1) Net debt = $760M - $246M Cash/short term investments - $237M Peanuts sale = $277M
2) I think Current median EV/sales multiples for the media content assets is around 1.8x (confirm?). I believe peanuts sold to Sony closer to 3x (confirm?). I'm not sure the exact net revenue Peanuts brings to DHX?
3) If we assume the 49% sold peanuts stake contributed ~$100M in revenue, the DHX projected revenue would drop to say around $350M. So we are looking at $350M x 1.8 = $630M of content assets.
4) Margin of safety: $630M = $277M net debt + Equity;
Equity = $353M, compared to under $200M current market cap.

This company is certainly a cigar butt, which I picked up close to $1. Seems to have a couple puffs left?
Read Answer Asked by Wayne on September 25, 2018
Q: Listened to micron CEO today explain effect of tariffs on his business, micron has some production facilities in China whose products when imported to USA will be subject to new tariffs. Net effect was margin decline of .5 to 1 %. Also they are looking to move production out of China to mitigate tariff effects. Would Photon potentially get some of this this shifting of production, not only by micron but by other semi manufactures? Does photon have excess capacity to go after hew clients? Greg A.
Read Answer Asked by Greg on September 25, 2018
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