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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,
In further response to Michael's question on Boyd, the analyst's report on Boyd that you mentioned essentially said that Boyd was over-valued.

The following is an excerpt of that report, but please post only if you consider it appropriate to do so and feel free to redact the size should you choose:

Future EBITDA growth for Boyd Group Income Fund (BYD.UN-T) is "set to slow from very high levels as large acquisition opportunities become more scarce," said RBC Dominion Securities analyst Ben Holton.

Cautioning that the open-ended mutual fund trust's valuation is currently near the high end of its multi-year range, Mr. Holton said he's "sensitive to the risk of multiple compression." He initiated coverage with a "sector perform" rating.

"BYD has been consolidating the North American auto-collision-repair market, and has more than quadrupled its revenue base since 2010," he said. "However, we expect the pace of acquisitions will slow, and with it, the pace of EBITDA growth."

He added: "The roll up of Multi Store Operations (MSOs) has driven consolidation in the industry, but these opportunities are becoming more scarce and more expensive. The slowing of this growth channel is significant as 70 per cent of the stores BYD added since 2009 came directly from MSO acquisitions. We believe organic growth will remain strong and single store acquisitions will accelerate, but are unlikely to make up for the decline in MSO activity. Further, the foreign exchange tailwinds benefiting 2015 can’t be counted on in future years. Specifically, we forecast revenue will grow at a 13-per-cent [compound annual growth rate] and EBITDA at a 16-per-cent CAGR over the next five years, still solid, but a significant deceleration from the 35-per-cent and 40-per-cent respective CAGRs seen since 2010."

Mr. Holton set a price target of $72. The analyst average is $77.22.

"BYD is trading at near record forward multiples, which we believe is at odds with our forecast of slowing growth," he said. "Accordingly, we see the risk of multiple compression. Specifically, BYD has traded in a range of 10-12x [next 12 months] EBITDA since mid-2013, though through this period BYD was growing EBITDA at a pace of [approximately] 50 per cent annually. Through this period, we also believe investors were paying up for potential MSO acquisitions that were not explicitly in forecasts. BYD is still trading at the upper end of this range, despite forecasts for slowing growth as MSO acquisitions become scarce."
Read Answer Asked by Christopher on December 16, 2015
Q: Hi Guys,

Are there any fundamental changes at Gamehost to cause the current drop in price to $9.00?

Is it only an "oil problem" or is debt becoming a problem with less earnings and therefore less cashflow?

Is the dividend at risk?

Thanks for the input.
John
Read Answer Asked by John on December 16, 2015
Q: This stock is down over $9.00 today. I don't understand why in down days on the market this stock moves up and when we have an up day in excess of 220 points the stock drop. What am I missing here
Thanks
Read Answer Asked by Rick on December 16, 2015
Q: your comments on the drop in Boyd's share price today please.
Read Answer Asked by Michael on December 16, 2015
Q: Whats your opinions on the news of adding 32 new restaurant to the royalty pool , it should to their revenues quite alot

thanks
Read Answer Asked by samuel on December 15, 2015
Q: Any latest thoughts on ZRE vs holding CSH.UN/HR.UN/CAR.UN and IIP.UN? Thanks.Paul
Read Answer Asked by Paul on December 15, 2015
Q: Do you think their dividend will remain intact? Looking back at 2008/09 BMO says they lost over $4 per share and the dividend was cut substantially. Was what happened then likely to occur again,(I didn't follow ACQ back then so maybe the company has changed dramatically?...) given BNN just ran an article about household debt levels and the fact that oil is becoming insanely low? I know management said the dividend would remain the same, but you can't really trust that, because if they were to say anything else people would have started to panic and sell immediately, and they still needed to raise capital after the last earnings report. Thanks
Read Answer Asked by Bryan on December 15, 2015
Q: Seems Mr. Market is underwhelmed or not paying attention to the SYZ announcement as shares are up only the amount of the special dividend on 100 traded as of the time I write this. Have they made a habit of specials in the past and do you agree with the CEO's statement that, "...our relative company value remains a fraction of our peers."? Which peers does he refer to? Thanks, J.
Read Answer Asked by Jeff on December 14, 2015
Q: is the severe drop temporary? should I buy more?
Read Answer Asked by Donald on December 13, 2015
Q: Hi team:

Since XTC announced its Q4/YE results on 12/03 SP has really taken off and it's now in over bought territory (RSI 72.22) according the TA reports. This is accomplished no less by going again a horrible week of sell-off at the TSX.

My experience with this name is that it's SP used to slide back down every time it peaked after quarterly earning announcements. So will it stick this time? Or I should at least take some profit for now and wait and see.

What's your advice? Thanks.
Read Answer Asked by Victor on December 13, 2015
Q: If Leons decided to monetize their real estate,would it be advantageous to the current stockholders?
Thank you
Glen
Read Answer Asked by Glen on December 13, 2015
Q: My timing was terrible on purchasing and holding 200 ACQ shares: I'm down 72%!!! Should I throw in the towel and move on? Unfortunately I don't need any more capital losses as I already have too many!
Read Answer Asked by Brenda on December 11, 2015