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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: Hi, TOY is a constituent of 5i Portfolios for a long time and it would also be fair to believe that this company is owned by a large number of 5i members. Recent bankruptcy of Toys r' us us cast a gloomy shadow on all toy manufactures and caused a huge uncertainty as to what is the near and long term impact and how each company is handling it. Your recent comments have addressed members' concerns to a good extent. But, is it possible for your team to do an analysis of the situation with specific reference to TOY, covering issues like, non-receipt of receivables, loss of sales, alternate marketing channels and company's relationship and past experience with them, near and long term anticipated impact on profitability. Also how is it likely to influence the growth projections in Canada, US and international markets. If it is possible to seek some clarity from the company, it would be really helpful. Toys r'us Canadian operations, reportedly have been agreed to be bought by a group. How does it impact ( positive or no impact) Spin Master.

Also based on your analysis and T/A, do you see more pressure on stock in near term and at what level you consider it to be a Screaming Buy. Thank you so much !!!
Read Answer Asked by rajeev on March 19, 2018
Q: An earlier question on TOY mentioned the downgrade (BMO) as being a possible factor in the decline in stock price. Just to balance the ledger and as can be seen below, while there was one downgrade, there were in fact 6 upgrades. This is why last week's decline seems to be pretty irrational, especially given how quickly TOY recovered following the initial Toys R Us negative news from a couple of months ago.
As always, keep up the great work.

3/9/2018 Raymond James Financial Boost Price Target Outperform C$57.00 -> C$65.00
3/9/2018 CIBC Boost Price Target C$58.00 -> C$63.00
3/9/2018 Royal Bank of Canada Boost Price Target Outperform C$61.00 -> C$66.00
3/9/2018 TD Securities Boost Price Target Buy C$61.00 -> C$69.00
3/9/2018 BMO Capital Markets Downgrade Outperform -> Market Perform
3/8/2018 National Bank Financial Boost Price Target Outperform C$63.00 -> C$65.00
3/6/2018 Canaccord Genuity Boost Price Target C$53.00 -> C$63.00

Read Answer Asked by karl on March 19, 2018
Q: GUD continues to go nowhere, and mostly down of late. It's been probably over 2 years that the story has been the same. Have patience and wait for Goodman to spend some of his $775m hoard. Recent earnings were underwhelming. Do you still feel the same way about GUD's prospects? Is there any thought of removing it from the portfolio due to it being a non-performer?
Read Answer Asked on March 19, 2018
Q: In your reply to Jeff you said that TOY did not quantify exposure to Toy R Us,& yet it said no carryover impact into 2019.In my humble opinion,Toy must know the potential loss.I wonder what is the impact on its share price,which has already dropped from $61.76(new high) to current $54.34.When is a good entry point? Thanks for u usual great services & views.
Read Answer Asked by Peter on March 16, 2018
Q: This group has posted disappointing results of late...what/when are the expected next earrings estimates? And when is it time to review whether these still should still be held? Thanks....
Read Answer Asked by adam on March 16, 2018
Q: Hi 5iR, This is not a question just a comment on TOY. 5iR I think you need to adjust your thinking on TOY. An increasing number of kids today do not play with toys. They play with their devices. As a grandparent I watch my grandchildren spend hours on their devices, not toys....it drives me nuts...... Since TOY is not in the software business, I would be a seller of TOY not a buyer. Cheers, Chris
Read Answer Asked by Chris on March 16, 2018
Q: What do you think of the Convertible Debenture issue announced today ? Thanks

2018-03-15 16:33 ET - News Release
Mr. George Paleologou reports

PREMIUM BRANDS HOLDINGS CORPORATION ANNOUNCES $150,000,000 FINANCING OF CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES

The debentures will bear interest from the date of issue at 4.65 per cent per annum, payable semi-annually in arrears on April 30 and Oct. 31 each year commencing Oct. 31, 2018, and each will have a maturity date of April 30, 2025.

The debentures will be convertible at the holder's option at any time prior to the close of business on the earlier of the maturity date and the business day immediately preceding the date specified by the company for redemption of the debentures into common shares at a conversion price of $182.51 per common share, being a conversion rate of 5.4792 common shares for each $1,000 principal amount of debentures.


Read Answer Asked by rajeev on March 16, 2018
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