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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: Article "Boomers Stuck in an Unfunded Liability"
Thanks for sharing this insightful piece. Could you please provide your view on this article. Do you generally concur with the premise that demographics and retirees/investors return requirements in a low interest rate environment is essentially creating an underlying put on risk assets that could perpetuate for years/decades to come. Also, could this imply a flatter than normal yield curve going forward as short term Fed rate hikes could be mitigated by pension demand at the long end, benefiting both mid to long term bonds and high yielding stocks. Also, I didn't see the name of the author of the article? Any idea who wrote it? Thank-you
Read Answer Asked by Gary on March 06, 2017
Q: Hi Team,

I would like add a high risk/high reward micro cap stock to my portfolio, and would not be crushed at all if I lose a good chunk of my investment should the stock end up tanking.

All 3 of these stocks have had great runs, but I'm leaning toward rolling the dice on FLY. BUS seems the riskiest to me given the huge influx of orders and lack of a lengthy track record of being in business. FTG seems the least risky, but not sure if its growth rate would be comparable to the other 2 companies.

Which of these 3 do you think has the best growth potential for a long term hold? And what other speculative micro cap high growth names do you like right now?

Also, generally speaking, over a similar time frame (say 5 or 10 years) do you think it is easier for a micro cap company to increase its share price from $0.25 cents a share to $0.50 cents a share, vs. a larger company's ability to increase its share price from $25 to $50 a share?

Final question is what are the key metrics you guys look at when trying to evaluate micro caps that often aren't quite profitable yet?

(I understand if you dock me for a few questions here - its all good!)
Read Answer Asked by Jason on March 06, 2017
Q: I asked this question pasted below but marked it private by mistake. Your propt answer is appreciated and contains valuable onformation. Please share this with the rest of your members and charge me another question for daling with this question again.

Q (Private): H2O Innovation has been trading in the 1.60-1.80 range for about 3 months, what is your opinion of what would drive this company share price higher or is it fully valued here?

Thank you in advance.

This question is private. Only you can view the question & answer.
5i Research Answer:

Looking through the recent numbers we would consider them good. The revenue growth is impressive, and cash flow growth was very good. Earnings were impacted by charges but we would consider cash flow more relevant here. We like the growth in recurring revenue and the backlog. The size difference makes a comparison with PUR difficult, but HEO certainly has some positive qualities, including a strong balance sheet, insider buying and nice growth.

We think the company needs to simply continue what it is doing, grow the top line, sign new contracts and continue to deliver on results. The shares are not cheap given the size of the company, so it is a name that may require a bit of time for the fundamentals to catch up to the valuation.
Read Answer Asked by James on March 03, 2017
Q: Good Day to all. I'm 63, retired and have $400,000 to invest. Funds won't be required for 8 years, I have a moderate risk tolerance and would target a 4% dividend return on the portfolio.

In this scenario and with current economic/political environment, do you recommend:

(a) an investor buy your model income portfolio as it is currently reported, or

(b) a different portfolio of stocks and perhaps ETFs and

(c) should such an investment be made today, in whole or in part.

Thank you for your valuable and much appreciated advice.

Ian
Read Answer Asked by Ian on March 03, 2017
Q: Holy Insanity! Who are the crazy gamblers (not investors) buying SNAP Inc at a price/sales ratio of 71 times! A valuation like that makes companies like Shopify and Nvidia seem like a bargain! I don't see anything that resembles a "moat" with this company, especially since Facebook has duplicated all the cool features of Snapchat onto Instagram? Am I missing something here 5i, or is this going to be the easiest SHORT for the next 2 years?
Read Answer Asked by SHANE on March 03, 2017
Q: In my well diversified portfolio, these are losers. I do not need the cash. Which in your view are not worth holding? I am content to hold on for any possible turnaround.
Read Answer Asked by Harold on March 01, 2017
Q: Hello 5i
As I watch several investments plumb new lows, it strikes me that things may have turned and I am unaware.

We have seen 5i exit some names that were originally intended for 5 year hold but today I have to say my investment measurements are lacking when it comes to exit signs.
In some cases, I would get out as the stock price breaks the uptrend but have been ignoring this giving some space for volatility.
Given my experience in finding stock prices equal to zero in my portfolio, I would rather buy stocks that go up.
How does an investor distinguish between a stock going to zero versus one that is just doing the volatility dance and on a temporary path to a short lived low price?

I would rather not be found holding companies indicating 40%, 60% and 80% losses going forward.

Your thoughts on this are appreciated.
Thanks
Dave
Read Answer Asked by David on March 01, 2017
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