Q: Hi. I own CSU and love it. Should I be concerned about the price today ?
Love your valuable service.
Jim,
Love your valuable service.
Jim,
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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: A member just asked about CGX...maybe this is the reason...from TD:
Yesterday afternoon, it was confirmed that Cineworld Group plc (CINE-LN, not rated) is currently engaged in discussions about a possible all-cash acquisition of Regal Entertainment Group (RGC-US, not rated), the No. 2 U.S. exhibitor, at a price of US$23 per share, or ~US$3.6bln (~US$5.9bln including debt).
However, no agreement has been reached.
Impact: SLIGHTLY POSITIVE
A US$23 per share purchase price is a 26% premium to Monday's closing price, but a 44% premium from a week ago. This equates to ~9.0x and ~22.0x 2018 consensus EBITDA and EPS, respectively. Implications for CGX include:
■ The valuation being implied for Regal gives us confidence in the ~10.1x we are applying to CGX's theatre segment within our SOTP calculation. CGX is currently trading at 9.7x our 2018 EBITDA estimate, and our current $47.00 target price is based on an 11.0x EV/EBITDA multiple applied to our consolidated EBITDA estimate for the 12 months ending September 2019.
■ We do not believe that CGX is currently for sale; however, applying Regal's takeover valuation plus the historical 3.0x-4.0x multiple point premium to CGX's 2018 EBITDA suggests that CGX could be worth $50-$55 in a takeout.
However, given its market share, mix of high-margin businesses, and strong earnings profile, we believe that this range would be the floor price.
■ The selloff in CGX shares has been overdone, exacerbated by increasing investor short positions over the past few months. We believe that industry M&A — which could be a consequence of what is perceived to be the diminishing influence exhibitors wield over the major studios — should provide short-term support for the share price. Over the long term, we believe that valuation will start rising once it becomes more evident that Cineplex's ongoing diversification initiatives are lessening its dependence on Hollywood content and when there is greater clarity surrounding the impact of Premium Video on Demand (PVOD). We expect these to become clearer closer to 2019.
Post if you think appropriate.
Yesterday afternoon, it was confirmed that Cineworld Group plc (CINE-LN, not rated) is currently engaged in discussions about a possible all-cash acquisition of Regal Entertainment Group (RGC-US, not rated), the No. 2 U.S. exhibitor, at a price of US$23 per share, or ~US$3.6bln (~US$5.9bln including debt).
However, no agreement has been reached.
Impact: SLIGHTLY POSITIVE
A US$23 per share purchase price is a 26% premium to Monday's closing price, but a 44% premium from a week ago. This equates to ~9.0x and ~22.0x 2018 consensus EBITDA and EPS, respectively. Implications for CGX include:
■ The valuation being implied for Regal gives us confidence in the ~10.1x we are applying to CGX's theatre segment within our SOTP calculation. CGX is currently trading at 9.7x our 2018 EBITDA estimate, and our current $47.00 target price is based on an 11.0x EV/EBITDA multiple applied to our consolidated EBITDA estimate for the 12 months ending September 2019.
■ We do not believe that CGX is currently for sale; however, applying Regal's takeover valuation plus the historical 3.0x-4.0x multiple point premium to CGX's 2018 EBITDA suggests that CGX could be worth $50-$55 in a takeout.
However, given its market share, mix of high-margin businesses, and strong earnings profile, we believe that this range would be the floor price.
■ The selloff in CGX shares has been overdone, exacerbated by increasing investor short positions over the past few months. We believe that industry M&A — which could be a consequence of what is perceived to be the diminishing influence exhibitors wield over the major studios — should provide short-term support for the share price. Over the long term, we believe that valuation will start rising once it becomes more evident that Cineplex's ongoing diversification initiatives are lessening its dependence on Hollywood content and when there is greater clarity surrounding the impact of Premium Video on Demand (PVOD). We expect these to become clearer closer to 2019.
Post if you think appropriate.
Q: As a follow up to the question asked today, in yesterday's Barrons online edition, there was an article by Michael Kahn called "3 stocks to play the rebounding Movie Theater Sector'. CGX may have moved up as part of that industry.
Q: Hi! What's up with CGX? Can't find any news.
Q: Is PKI an appropriate alternative to the (expensive) pipeline/infrastructure stocks and ATD.b or is the debt too concerning at the moment? Thanks!
Q: I recently bought ZCL based on 5i recommendation. Then after a missed quarter you drop ZCL from the growth portfolio, so I'm left holding a stock you no longer follow.
However for GUD you continue to recommend quarter after quarter based on no news or developments and a declining stock price?
However for GUD you continue to recommend quarter after quarter based on no news or developments and a declining stock price?
Q: For a "well diversified portfolio" and "Forever" holdings in Financial Sector, what would be your top 2 choices long-term [5 years] - assume 1 bank and 1 Alternative Finance, but your call. Looking for growth at a reasonable price.
Q: Hi 5i,
NFI has been quite weak...do you have any concerns on it?
Thanks,
Dave
NFI has been quite weak...do you have any concerns on it?
Thanks,
Dave
Q: When is SYZ reporting & expectations?Thanks for u usual great services & views
Q: Please comment on earnings? Thx
Q: Hi team,
This question is probably going to highlight my ignorance in this area only, but I am going to ask it any: Would it make sense for CSU to take over DSG in a mega deal? Would there be any synergies from a friendly acquisition? If yes, why CSU is not interested in DSG? or similar large Canadian software companies?
I have both and not sure if there are any advantages in keeping both.
Your feedback and insight is much appreciated.
This question is probably going to highlight my ignorance in this area only, but I am going to ask it any: Would it make sense for CSU to take over DSG in a mega deal? Would there be any synergies from a friendly acquisition? If yes, why CSU is not interested in DSG? or similar large Canadian software companies?
I have both and not sure if there are any advantages in keeping both.
Your feedback and insight is much appreciated.
Q: Can you provide any update on GPS, I understand a number of senior officers have recently been replaced.
Q: SYZ has been a long time winner for me. What are some of the reasons no analysts follow this stock while there are a lot of " dogs " out there that are being followed ? Thanx Robbie
Q: I have owned MAXR/MDA(in my RSP; approx 2.5% of my Portfolio) since 2015 and currently Market Value slightly greater than the Book Cost . I am a long term investor ,however, I am undecided re keeping MAXR or to sell and invest in another stock. Your input would be appreciated. Second question-what two stocks would you recommend regardless of sector/weighting at this time?
Q: hi
regarding New Flyer it has been labelled a cyclical stock in the past. What cycle does that refer to? Is it the business cycle and the fact that there will eventually be a downturn or something to do with how the year plays out for them as I notice the stock seems to appreciate more in the first four months of the year?
thanks
Joe
regarding New Flyer it has been labelled a cyclical stock in the past. What cycle does that refer to? Is it the business cycle and the fact that there will eventually be a downturn or something to do with how the year plays out for them as I notice the stock seems to appreciate more in the first four months of the year?
thanks
Joe
Q: Good afternoon 5i team,
I have been looking into tax loss buying and keep coming back to your high view of Knight Therapeutics. It seems that a good deal of your views on the stock depends upon management. And in looking into the stock a little, it does seem that Jonathan Goodman is a kind of Wayne Gretzky in the business world. A rich kit who did well:). Here in Montréal he also recognized as an important philanthropist. A couple questions I have that I would appreciate your seasoned view on:
The CFO left but he doesn't seem to be just any CFO. he was also it seems a kind of founding partner of Knight. His position has been taken by the former CF O of Paladin, so that is good. But, he does seem to have been more than a CFO. I notice that the company that he moved to has become increasingly closer to Knight. So, I was wondering whether this was perhaps a strategic move by both companies. But, perhaps I am reading too much into it. You probably have heard more about this change than I would have and so I would appreciate you view on both the loss and the possibility of a strategic move.
Secondly, it seems that Jonathan Goodman is all - important at GUD. He has had an accident and although he seems to be, as he says, 'Almost' as good as ever, there is still a question there. He seems to have the intelligence to find a small but lucrative niche in this field and has the strength and selling ability to make the most of it. He looks good. But, what if he goes? I am not sure but I believe you mentioned in your report that the actual cash that they hold would cushion against that eventuality. Am I right in that understanding?
And heck, since it is Black Friday, I will throw another question in for free: You say that patience is needed. He says that it is going to take twenty years. Many of us are beginning to see twenty years as a pretty big number and we may not be here to see the tree grow. So, is it a good investment for the older crew? But, maybe like the old apple tree, we are better to plant one for the next generation.
thanks
I have been looking into tax loss buying and keep coming back to your high view of Knight Therapeutics. It seems that a good deal of your views on the stock depends upon management. And in looking into the stock a little, it does seem that Jonathan Goodman is a kind of Wayne Gretzky in the business world. A rich kit who did well:). Here in Montréal he also recognized as an important philanthropist. A couple questions I have that I would appreciate your seasoned view on:
The CFO left but he doesn't seem to be just any CFO. he was also it seems a kind of founding partner of Knight. His position has been taken by the former CF O of Paladin, so that is good. But, he does seem to have been more than a CFO. I notice that the company that he moved to has become increasingly closer to Knight. So, I was wondering whether this was perhaps a strategic move by both companies. But, perhaps I am reading too much into it. You probably have heard more about this change than I would have and so I would appreciate you view on both the loss and the possibility of a strategic move.
Secondly, it seems that Jonathan Goodman is all - important at GUD. He has had an accident and although he seems to be, as he says, 'Almost' as good as ever, there is still a question there. He seems to have the intelligence to find a small but lucrative niche in this field and has the strength and selling ability to make the most of it. He looks good. But, what if he goes? I am not sure but I believe you mentioned in your report that the actual cash that they hold would cushion against that eventuality. Am I right in that understanding?
And heck, since it is Black Friday, I will throw another question in for free: You say that patience is needed. He says that it is going to take twenty years. Many of us are beginning to see twenty years as a pretty big number and we may not be here to see the tree grow. So, is it a good investment for the older crew? But, maybe like the old apple tree, we are better to plant one for the next generation.
thanks
Q: BCI trades with very low volume I like bci but if I take a larger position in it and I want to sell I would have issues in getting out of BCI I bought PBL on your great advice but it also has low volumes this is the case with many small cap companies you are a great source of stock information
Q: I have held Stella Jones for over a year and it has finally started to move. I wonder if all the metal poles I see are hurting this companies bottom line. Could you clarify what you see as the future prospects or would it be better to sell at a modest profit and move on to a better story.
Q: SIS just broke through resistance of 17.40 or so on a little above average volume on Friday, even though the US market was only open half the day.
Would you think it would be a good time to add a little here given its all time high or wait to see if it cools off a little first?
Thanks
Jeff
Would you think it would be a good time to add a little here given its all time high or wait to see if it cools off a little first?
Thanks
Jeff
Q: In a registered account I still have some byd.un. thanks to you, I have not sold them all as the price went up and up. But as of now I really don't see the valuation here. With no tax consequences to worry about. Just the trading commission Which name might be better to switch into.?
Thanks
Thanks