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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: You may have read an article posted on Seekingalpha regarding Nobilis. It is basically an all out attack on the co. (in my opinion). Is this an orchestrated short attack, or is there merit to some of the alleged issues? The author has stated they are short NHC so there is that. Earnings are due next month I believe.
Read Answer Asked by jason on October 09, 2015
Q: Peter & Team, NHC is down 25% and was twice circuit breaker halted today. Would you care to comment on a Seeking Alpha piece attached? I can find no other news.

http://seekingalpha.com/article/3561556-nobilis-about-to-fall-from-nobility-part-i-65-percent-downside?app=1&auth_param=cnfd0:1b1fjrl:a319bf57fbddf7c8bc89b0fac7269511

Thank you.
Read Answer Asked by Keith on October 09, 2015
Q: Nobilis is the latest healthcare stock to take a swoon. An article on Seeking Alpha is probably to blame:

http://seekingalpha.com/article/3561556-nobilis-about-to-fall-from-nobility-part-i-65-percent-downside

Would you continue to hold?
Thanks.
Read Answer Asked by Kent on October 09, 2015
Q: Hello Peter,
Regards your response to a question today, swould the increase in credit spreads on its debt affect its ability to raise the $950 million, or make the terms for the debt unfavorable for the company thereby impacting the bottomline for the next 6to 8 quarters? Has the risk increased and the probability of a bounce reduced thereby making the current price appropriate rather than attractive?
Regards
Rajiv
Read Answer Asked by Rajiv on October 09, 2015
Q: Hi Peter, I have to confess that I became too greedy today and bought 5% of my portfolio at 45.20. In retrospect now I am thinking I took probably too much risk. I started buying CXR at CAD 86 and then bought some at CAD 65 and again some at CAD 50 and today CAD 45.20. Now it is 15% of my taxable account portfolio. My average cost is now at around CAD 55. Should I see some position?

I read TD Securities report and they have a Price Target at CAD $105. I read RBC report too and they have USD $86 target price(in their worst model it is USD $30). Also read Jason Donneville letter. Anyways reading at the reports and looking at your responses since 2014 for this company it seems to me it is significantly undervalued. As say 4.6X 2017 earnings(that is a PE a Bank deserves during a financial meltdown). So I am not sure what I am missing here. I know they have high debt load, but looking at their current debt to equity ratio(I got it from TD, can you please confirm from Bloomberg? Also I believe this is pre-amdipharm number), it is lower than Valeant. Anyways, considering healthcare earnings estimates are usually accurate(i meant not in vagary of economic downturn), what is the major problem here(that retail investor like me don't know)? Can you please jot down the risks? Also is there any possibility that they could not acquire amdipharm? Can you tell me from Bloomberg if any institutional selling recently? Can you elaborate on that? Also being a very popular stock why don't you guys please start coverage on it? Also what is your earnings target for this in 2017?
Read Answer Asked by Sridip on October 09, 2015
Q: Jason Donville just released his Q3 newsletter:

http://www.donvillekent.com/pdf/DKAM-Newsletter-October2015.pdf

It's always a great read, but I thought your readers may be interested in what he has to say regarding CXR. Please note this is the last paragraph of a lengthy discussion in the newsletter:

"So, where to from here? CXR has completed its equity issue and its underlying businesses are strong. But we also know the company is carrying more debt than we would like. Going forward, we think the stock is still quite undervalued but the company will need to address its debt issue somewhere down the road. This could mean that the company raises more equity or puts itself up for sale. Regardless, at current valuations, I think the company is worth a lot more than $50 a share. On our numbers, CXR trades on 4.8x 2016 Cash Earnings and 1.1x BVPS, while earning a 24% ROE."
Read Answer Asked by Arneh on October 08, 2015
Q: I currently don't have any exposure to the healthcare sector. Would you please make a couple of recommendations.
Thank you
Read Answer Asked by Rose on October 07, 2015
Q: Hi, Peter publish at own will.
No comments

A quick run on numbers (US) Health care

EPS growth
q2 15 8%
Q1 15 10%
q4 14 11.8%
q3 14 12.4%

Revenue growth
Q2 15 11.6%
Q1 15 17.6%
q4 14 22.3%
q3 14 16.3%
Read Answer Asked by claude on October 06, 2015
Q: Hi, Peter For info only, publish at will
Another reason Health Care was weak Monday, was the passing of the TPP (or Trans Pacific Patrnership), which according to The Hill, a Beltway newsletter which provides daily updates,

” Trade officials from 12 countries agreed Monday to shrink the length of time that pharmaceutical companies can receive monopoly rights for certain drugs, a provision that is already threatening to incite a Big pharma rebellion on Capitol Hill…Brand-name companies would receive up to eight years of monopoly rights for drugs known as biologics — a decrease from the current 12 years provided under U.S. law, according to officials involved. The final language of the deal has not yet been released.”
Read Answer Asked by claude on October 06, 2015
Q: Hi Peter,

I bought this stock at 11.49, is it ok to average down based on this news of should I wait.

Thanks,
Paul
Read Answer Asked by PAUL on October 05, 2015
Q: Both Concordia and Valeant are down 8.5 and 10% respectively at the moment. Is this due to normal volatility or any consequence of the TPP deal? Would you consider either a bargain over the next three years and which one would you prefer?
Thank you.
Read Answer Asked by Steven on October 05, 2015
Q: Hello Peter & Co,
A follow-up on my previous question regarding your ranking of my holdings CRH,CXR,GUD,PHM,PLI,RX and VRX; you ranked GUD,CXR and VRX as the best by a wide margin and that PLI is good but expensive; you did not comment on or ranked CRH, PHM and RX
Thanks,
Antoine
Read Answer Asked by Antoine on October 05, 2015
Q: Just wandering about the recent pullback in these two stocks do you think it's just collateral damage from Hilary's remarks or are the underlying stories still intact,would you consider this a buying opportunity at these levels thanks Greg.
Read Answer Asked by Greg on October 05, 2015
Q: Hi, Valeant's share price took huge hit over past two weeks, after Hilary Clinton comments and Democrats' request for a subpoena for drug pricing. There are two drugs in question, where price increases were 225% and 550% appx. As per analysts covering the stock, even if price of these two drugs is reversed, it should impact the share price by about $8-$9. Except one major brokerage, no one has changed rating of the stock (Most have Buys). Although a few have adjusted price targets between $10-$15 but average is still about CAD$325. Last week stock traded as low as $204.50 and has now stabilized in $230-$240 range. Only a few weeks ago it traded as high as $347. Despite the near term headline risk (although it is not known if house committee will even accept the democrats request for a subpoena and US history of very limited success with drugs price control), is it reasonable to accumulate shares at these levels, in your view? Valeant still appears to be the only choice in large cap pharma sector in Canada (of course Concordia being the other)and I am wondering if there is an opportunity here. Thanks, as always for your valued comments.
Read Answer Asked by rajeev on October 05, 2015
Q: Hello Peter & Co,
10% of my portfolio is in that sector
CRH,CXR,GUD,PHM,PLI,RX and VRX
With the intent to shifting funds from what I perceive to be lower ranked to higher ranked ones, I would appreciate your input.
Thanks,
Antoine
Read Answer Asked by Antoine on October 05, 2015
Q: Hi- just thought my fellow subscribers who own Valeant might be interested in this article, which, in brief, states that Valeant is one of the greatest increasers of drug prices and may be affected by the Hilary Clinton furor.
http://www.zerohedge.com/news/2015-10-04/more-pain-biotechs-ahead-valeants-astronomical-price-increases-take-center-stage-pfi
Read Answer Asked by Pat on October 05, 2015
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