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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: Another AVO

I bailed out wen it hit $14, unfortunately the bottom. I am used to these type of drops because I have had drug stocks that do that on a regular basis when they do not get to phase 2. Sino forest, which I held a few years ago, I rode all the way down to 0. I've learned over time, the market knows best if a stock is under performing. People closest to it know it best and they are selling it. I will cut my losses if it gets 10% below my purchase fee or if it has risen a lot and starts to lose momentum. What is your opinion?
Dennis
Read Answer Asked by Dennis on October 09, 2014
Q: In response to some recent questions on Contrans, you mentioned that we should know in the next 12 days if they will declare /pay the regular dividend. The following is a quote taken from the Globe article 2 days ago:

“In a telephone interview, TransForce CEO Alain Bedard confirmed that the dividend (Bloomberg estimates it at $0.15 a share) that would have been declared in mid-October won’t be paid. “There are no more dividends for Contrans’ shareholders.””

My first question is what gives the right to the Transforce CEO to confirm anything with respect to what Contrans will or won’t do? And my second question is that given his statement (if we take it to be correct) what makes you believe that it is still possible that Contrans might actually pay the regular dividend.
Steven
Read Answer Asked by Steven on October 09, 2014
Q: Hi Peter and Team,

First of all, congratulations to Peter for a magnificent ride supporting such a worthy cause.

Another question about CSS (sorry!): Even with the price of CSS hovering just under $15.00, I'm still up 30% and I thank you for that. How would you feel about me not tendering my shares, but selling CSS outright before any deal is finalized? I plan to use the proceeds to buy TMA to stay in the same sector. The reason for all of this is to avoid any "shenanigans" that seem to be occurring (or maybe I'm wrong about my feelings of uneasiness?)

Thanks in advance for your insight.
Read Answer Asked by Jerry on October 09, 2014
Q: Peter, what is your view on HLF and the acquisition of Atlantic Trading Company. Market didn't seem to react favourably. Thanks in advance.
Read Answer Asked by Iskandar on October 09, 2014
Q: I note on Sept 24 the CEO moved 147k shares ($2.6M worth) to different accounts - including $540k worth to his RRSP. Is it safe to assume this was purely for tax reasons, and can we infer he thought the stock was finding a bottom at $18?
It's amazing that the company easily raised $100M at $29 just 6 months ago. At 1/2 that price it appears a compelling buy.
Thanks for your thoughts on the company.
Read Answer Asked by Scott on October 09, 2014
Q: Hello Peter and team,

I would like to increase my exposure to the technology sector (10% to 15% of my portfolio). Currently it is 6.2% of my portfolio (4.1% in CSU and 2.1% in AVO). Should I add to these stocks to increase the weighting, or would you suggest other technology stocks to complement what I have. I am considering OTC. I am a medium risk, buy and hold investor (hold for 3+ years).

A similar question with consumer staples. I only have ATD.B and it is 3.8% of my portfolio. Should I add more to this stock, or would you suggest another stock to complement what I have.

I know it is practically against the law of investing to average down, but I could not resist picking up some AVO today at $13.52. Sir John Templeton said to “buy at the point of maximum pessimism”, and there has been a lot of pessimism lately on that stock. Easier said than done. I have not been able to tell when the point of “maximum pessimism” is reached until long after it has occurred. However, what gauges would you use to help you pinpoint the point of maximum pessimism for a company?

Paul J.
Read Answer Asked by Paul on October 09, 2014
Q: Just a comment on gaps: according to A.J. Monte of The Market Guys 80% of these get filled back in eventually so if you're bullish on AVO a reasonable target (to recoup some losses?) might be $25 where it gapped down from to $22 in May. $25 is also where the 200 day moving average is currently so it's not an unreasonable destination to look for. First though would be to break up over resistance at $17.50.
Read Answer Asked by Jeff on October 08, 2014
Q: CIBC report-there are some very good & welcomed positives beyond the reduction of the TP fr $40 to $25.Rating is SECTOR OUTPERFORM.Sales force growth ends as focus turns to bottom line is the headline.It is on track to meet revenue target & any shortfall can be made up by a accretive acquisition(s)with the $150m cash in hand($3 per share).The material drop over the past week is primarily due to investors lowering earnings expectations as well as the negative headline news. As I write,it is trading @ $14(up 0.45.3.2%)
Read Answer Asked by Peter on October 08, 2014
Q: With the pasting in the markets, I am looking to raise some cash to purchase some higher yielding stocks such as BTE, COS etc when they appear to be reach the bottom. Accordingly I am thinking of selling DH and MIC. Both of done nicely for me but for the most part I see limited capital appreciation opportunity with them. See anything wrong with this thought process?
Read Answer Asked by Mark on October 08, 2014
Q: I'm about ready to throw in the towel on this one, having kept my shares until now to make the point to both CSS and TFI management that I was opposed to the TFI buy-out. With little chance of an alternative bid, I might as well tender. If I do, is the settlement immediate or do those who tender have to wait until the overall deal is consummated?
Thank you and kind regards,
Read Answer Asked by Geoffrey on October 08, 2014
Q: Article in the Globe saying that Contrans may noy pay it's next divy with a major shareholder livid over this news. How is this possible? Do you still recommend holding and what is your "best guess" as to the outcome? Thank You
Read Answer Asked by Ronald on October 08, 2014
Q: Anyone interested in charts should read “Technical Analysis of Stock Trends” by Edwards and Magee. The yearly chart of AVO is classic example and a good study for the student of Edwards and Magee’s work. I use to think of reading charts was right up there with witchcraft, however, it is really a study of investor’s reaction to the market.

A couple of noteworthy points on AVO’s yearly chart:
First is the Island formed with the Gap Up in Nov. of 2013 and then the Gap Down in May of 2014. A Bearish signal.
Second is the Ascending Triangle formed from the Gap Down in May to the first week in August. Instead of breaking to the upside, the stock Gap Down once again. A Bearish signal.
The stock did not hold the 18.00-17.50 support level and now we are seeing fear.

I entered this stock after the sell off with the CFO leaving. I had a full position by the time stock broke out ascending triangle to the downside. Once the stock broke out of the $18.00 range I was down over 20% and finally got out at $15.00 for a 30% loss. Sorry if I have sinned, but I’ve had to many long term holds over my investing career.

Al
Read Answer Asked by Alvyn on October 08, 2014
Q: Just for information CIBC downgraded AVO to $25 from $40 which is one reason for the drop. The second reason is that apparently they are facing competition from China as pointed out by a BNN guest this morning. The third reason is that I bought the stock at $17 a few days back which is one the biggest reason for the drop as whenever I buy people should start selling.
Read Answer Asked by Imtiaz on October 08, 2014
Q: With the probability of the upcoming aquisition by Transforce, what do you feel will be the resulting impact to the share price of CSS, after transaction? As a related topic, how would you compare CSS_Contrans to TMA_Trimac. I`m thinking this may be hard one to decipher and look forward to your input, as always. Thank you Peter and Team!
Rick
Read Answer Asked by Rick on October 08, 2014
Q: I would like your opinion on canexus as I see it has been badly beaten up. Do you feel this is an opportunity to enter at this time. Thank you
Read Answer Asked by Loretta on October 08, 2014
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