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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: This company continues to make the headlines with new contracts and good news... I know it is a Cannabis company which is overvalued based on current sales, revenue earnings etc, but they have a low P/S in relation to peers, positive EBITDA and positive cash flow from operations).

I own it already and recently asked a question after their 2nd quarter. Today they announce at $30 million agreement with Cronos Group for 18 months with an additional $30 million revenue potential PLUS a separate tolling agreement (which they also offer to multiple large Cannabis companies. They are close to EU GMP facility certification which will be a big step for them for sales to Europe and for medical cannabis sales. They have hinted at CPG deals in the works and with upcoming vape pens and edibles etc being legal in the fall it seems like there are lots of positive catalysts for this stock in particular. What to you would be a good way to value this type of company which focuses on extraction not dried flower sales. What are your thoughts on the recent deal announced?
Read Answer Asked by Michael on May 15, 2019
Q: Thanks for your rapid reply to my question but I just have a quick follow up to the last line of your response which was: "Investors may also take some profits post closing, potentially causing an overhang and keeping buyers today on the wary side. "

If we are talking about post closing, then OH shareholders will have already received .8428 shares of CL for each OH share which would put them well ahead of where they are now based on the current disparity in prices between the two companies. Thus, rather than be wary, at this point they should be buying to take advantage of this disparity.

Thanks again.
Read Answer Asked by karl on May 14, 2019
Q: As can be seen, Cresco Labs is acquiring CannaRoyalty Corp. Can you provide any reasons why there is such a disparity between the price of OH and CL as we head towards completion of the takeover? As I write, CL is worth $15.65 yet OH trades at only $11.28. Based on the ratio of shares of CL they will receive, OH should be worth $13.19. If the deal was going to close in a year I might understand but it should be closing within a few weeks so the spread seems inordinately large.
Many thanks.

Read Answer Asked by karl on May 14, 2019
Q: I own the above companies with the following corresponding weighting:
2.6%;1.3%;2.2%;2.5%;2.7%;2.2%. I am looking at the possibility of doing some consolidating - what are your thoughts on consolidating? If I consolidate - what 1 or possibly 2 companies would you eliminate and what 1 or 2 companies would you add to?
Use as many of my questions as you need and thanks for your excellent service.
RAM
Read Answer Asked by Ray on May 14, 2019
Q: Can you explain the rationale for recent move of the selling of shares by the major shareholders? They sold at quite a discount to where the stock has been. None of the funds raise will be used by the company. My understanding is that they hold 500M and could only sell 140M. Plus expectation is to list on a major exchange - is this signalling that won't happen soon. Thanks
Read Answer Asked by Aubrey on May 13, 2019
Q: Can I get your thoughts on Brookfield's (BAM.a) earnings, today, vs expectations.

What do you think of their valuation against the backdrop of a diminishing FFO (Scotia estimates: 2019 FFO of $3.78 vs 2020 FFO of $3.75)

Lastly, can you comment on their debt levels. Looks like a significant decrease in debt levels in expected in 2019.

Thanks.

John
Read Answer Asked by john on May 13, 2019
Q: HI Team,
Could you please comment on Medipharm's recent Q1 earnings. The market reaction appears flat with a run up beforehand. Growth looks good and I like the model, though have a hard time wrapping my head around the current valuation of around 700M, having only a couple small properties (one in Barrie and one in Australia) with apprx 60 employees. I know this market is inflated, however I believe the extract business is a good play. Is Medipharm a strong front runner in Canada in its field? What do you think of its valuation compared to its potential growth as well as its current earnings?

Cheers,
Read Answer Asked by Ryan on May 10, 2019
Q: I'm currently looking to start a new position and am looking for a company with the potential to add a bit of torque potential to the portfolio. Would LSPD fit the bill as far as a Canadian listing, and are there any US companies that you believe might also provide fit the bill? This is a fairly risk tolerant position.
Thank you
Read Answer Asked by Mike on May 10, 2019
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