Investment Q&A

Q: RRSP vs TFSA vs non-registered accounts. Sector balancing aside, what would be your top 3 picks for each type of account? Incredible site, thanks for all your work.

Q: I had let PHO shares rise substantially, trimmed close to the high which made me feel smart, then watched them go all the way down to current levels, which makes me question how smart I am. In hindsight it was no secret of a slow down in the sector spending, even in a good market likely the shares would have dropped substantially. Regarding spending cycles, historically is there any pattern time wise?

Q: Hi Team,

I was looking at the GSY price movements for last 20 years and during dot-com and 2008 recession as well as 2011 correction the stock dropped down by almost 40-50%. It seems because of its small size and consumer credit business the stock gets hit hard during market downturns./recessions. The stock jumped from 17 to 53 in last 2 years and has dropped by 1/3 in last 2 months. Would like to get your thoughts..

Thanks
Ninad

Q: Tsgi has been up nicely for a couple of days now with no reason, Is it time to buy full position of tsgi? Thanks always

Q: I ve been looking for a way to invest in the rise in popularity of car shares like zip car or car2go.

I haven’t found any pure plays but was thinking BYD may see a benefit from this trend. I feel like these vehicles must see lots of bumps and dings during their life in the city and users caring less about them than their personal vehicle. I would assume car share companies would prefer to work with larger auto body companies like Boyd for these repairs.

I’m curious to hear your thoughts on this and if you have any other ideas on how to invest in this trend.

Thanks!

Q: Thank you again for this excellent service. I have a question about Savaria. In their most recent quarterly results, for the 9 months ended September 2018, stock-based compensation is $899K on $12.9M income. If I have done my calculation correctly, the stock-based compensation is about 7% of expenses. I do not know how to find the base salaries for the management (which would presumably further increase the management cost for the firm).
Is this not a lot excessive? Should I be concerned about the "cost" of management and how this cost could dilute shares or profits?
Thank-you

Q: I have owned shares of GSY for a number of years. Despite what I thought were very positive quarterly results and a strong outlook, GSY shares have taken a steep drop in the last few weeks. I noticed that insiders have made 35 buys (and no sells) totalling several million dollars in the last two weeks. I would think this is very significant news especially given that the President said on the conference call said that he did not feel that the company had credit quality issues (which seems to be a concern flagged by analysts). In previous conference calls, I have always found the President to be very transparent. Am I missing something here? If management uses their own money to buy millions of dollars of the stock, is this a strong signal that the stock is undervalued?
If you agree, is there any site you can go to which identifies the recent buying by management of the company stock, and presents the information in a table format?
Also, the Globe and Mail often does an article highlighting insider buys. I have not seen the GSY purchases identified, yet, they highlight much lesser insider buys. Any idea why? Is the data on the 5i website more current than other sources?

Thank you again for this wonderful service!

Q: Tsgi is up 7% today, is there any good news? Thanks

Q: Hi folks, thanks very much for the Screener-Tax loss selling list of companies. I didn't see Photon Control on it. The stock certainly had more than 15% loss in 2018, by not on the list, does that mean Photon has minimal % projected revenue growth in 2019. I like the company and would you suggest a good entry point at $1 level. Thanks as always, jb

Q: Do you consider the dividend safe? I see from the company profile that it raises it's dividend consistently over time. Has it ever reduced it's dividend? What is the current payout ratio? When I try to calculate it, I get well over 100%

Thanks...Steve

Q: You were asked a question regarding Savaria's forward PE multiple. Your response was 28 which is the same as the trailing PE multiple. How did you come up with that number? If a 28 multiple is true this stock is trading at a multiple that makes it very vulnerable to further declines despite what has happened in the last few weeks. I would like to know what your expected earnings per share are in each of the next two years please. Also could you identify anything on the horizon based on your analysis or management expectations that could lower or increase this estimate. And how do your numbers compare to management forecasts?

Q: Hi 5i,

Looking at pulling the trigger on a handful of Canadian stocks that've gotten beaten up lately to round out the Canadian portion of my portfolio.

I love a number of your recommendations. The one I seem to be struggling with the most is Savaria. P/E seems so high, its like it trades as a growth tech stock. In another question you indicated its forward P/E is 28.5 even with the recent correction.

So I guess my question is whether the confidence is still high for this pick? In a world where other Industrials like Magna and Linamar trade at such low multiples, does SIS really deserve the premium?

Thanks!

Ryan

Q: I track my asset allocation in detail...retired, lots of time and interest to do so. I break out ETFs and my few mutual funds by sector. A few of my stocks are split into a pair of sectors. As an example, TRP is sometimes referred to as a Utility, but seems to track the Energy sector...so I split it 50-50. Ditto for CSH...I split it 50-50 between REITs and Healthcare.

Both NFI and TCL are listed on the Company Profile as being in the Consumer sector, but I have seen them both in the Industrial sector as well. Using my TRP and CSH examples above (to be consistent in my tracking methodology), where should NFI and TCL be allocated...solely to one sector or 50-50?

Thanks,
Steve

Q: Is there an update to forward 1 year p/e ratio on these companies? Thanks

Q: Sorry, yet another question on Premium Brands. In your response to Jim today you noted that 5I would consider the management of PBH to be good. In their 2019 Outlook they indicate they are expecting close to $10 per share of adjusted EBITA. Also they expect revenue of $3.7billion. Both seem impressive numbers, if they can be relied on, and the latter is especially so given the current market cap is appx. $2.4billion.

Analysts have reduced their earnings estimates for next year from $5.54 to $4.53 giving a forward PE of 16 which is below the 5 year low PE of 23.

Debt seems on the high side at 1.26 times equity and management have noted they are paying higher interest rates because of the current debt to adjusted EBITDA ratio. However interest coverage seems reasonable at 4.3 and if the EBITDA comes in as they expect there might be some interest rate relief.

In light of this what reasons would you advance for not investing at todays price?
Mike

Q: Greetings,
Falling sword or a possible future potential ?
At what price range is the running actual business worth more than share price?
At what point would you say it has become worth a "punt"?
Cheers

Q: THANK YOU FOR THE SOLID WORK IN A VOLATILE MARKET . REALY HELPS .. CAN YOU SEE SIS CONTINUING TO GROW DOES IT HAVE ROOM FOR MORE ACQUISITIONS . PAYOUT RATIO ON DIVIDEND THANKS

Q: Does the reduced outlook that NVDA gave yesterday affect your thoughts on Photon PHO at all? Does the guidance from both companies "jive" as to the general outlook? Or is Photon so small that it could grow rapidly even with the reduced macro outlook? I'm trying to figure out how agressive to be with Photon since I do like the changes the company has made in the last couple of years.

Q: I know photon is a cyclical and will come and go with the semi sector, but at an EV of 70million making almost 2 million in interest alone, the company would trade at 50x earnings without even their core business. would you still expect them to remain profitable, even with a very weak sector?

Q: Hi, I took a half position in TSGI at $44.68, what do you think of adding to it now? Thanks. Peter