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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: If you had to put a fair price ( or range ) on the stock today - what would it be? If you want to wait till after the quarter to answer the question that is okay. I don’t trust analysts but I trust you. I am trying to decide at what point I want my average price to be. I have $20,000 in cash to add to my position and the investment now will have very substantial profits in five years which I know the price will be significantly higher than it is now. I am usually NOT in favour of averaging down but I know they will get to the other side intact. Currently my average price is just north of $32, which I thought was good 45 days ago.
Clayton
Read Answer Asked by Clayton on May 19, 2020
Q: I'm a bit flabbergasted at your recent bullishness on CAE considering the state of the airlines. But I trust you and haven't sold my position that is down 30% as of today.

I have a few questions about the backlog which I think you mentioned sits at 9 Billion dollar. So with so much work, why do they layoff staff? Is it that the staff laid off can't actually help with the backlog (i.e. they work in sales instead of engineering or something?). With do they suspend their dividend? Why have they not invested (now or previously) to deal with the backlog that they seem to have had for so long?

I get that CAE is uniquely positioned to succeed if things go well. However, they are so positioned in an industry I don't see getting back to 'normal' anytime soon.

C.
Read Answer Asked by Cameron on May 15, 2020
Q: 2 Questions on Lightspeed, the stock has of course dropped like a rock and rebounded significantly from the lows 6 weeks ago, but even still if it were to head back to February highs it would be an increase of 80% from todays price.

I am trying to understand how much revenues can and are being disrupted by their clients business closures at least in the short term. They list in the most recent MD&A, software and payments revenue (cloud-based software subscription licenses and recurring revenue sources including payments solutions) accounted for 89 % of the previous 9 months revenue. Also noting that most clients are on 12 month contracts with monthly payments. With lightspeed payments only being introduced in the previous quarter there cannot be much revenue lost yet as it was more of a future revenue potential not a current revenue driver. I don’t think they breakdown what their cut would be with the current payment partnerships but they would of course lose out on payment fees potentially similar to SQUARE whose Payment volume was down 39% their final 2 weeks of the quarter, but how much do you think that could change Lightspeeds revenue?

Just a quick browse on their website shows they offer and excel in e-commerce for businesses, so some or most clients would be online and able to operate, if not they should and could be scrambling to add the capabilities to operate online, so this should be a net positive for this type of company (omni-channel commerce SaaS) in this changing business landscape due to COVID-19.

With lots of cash on hand to weather the short term storm, a high % of recurring revenue and the desperate need for businesses to be online would you not think Lightspeed for a long term play or even short term is one of the best options out there for growth?
Read Answer Asked by Michael on May 14, 2020
Q: I am hoping that you can shed some light on the revenue streams for CAE. I don't expect the airline industry to show much growth for a couple of years and but I am wondering how much this affects this company. How much of their revenue is generated from training brand new pilots, pilots on new aircraft, regular ongoing training for pilot license maintenance etc.? I know you like CAE and I normally don't pay that much attention to timing as I am a buy and hold investor. However, I am wondering if in this instance are growth revenues still two years away or do they maintain fairly even cash flow? I am assuming that the medical division is still a minor contributor to cash flow.

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on May 14, 2020
Q: I am trying to reflect on what the POS means for SHOP and other businesses. Does this suggest that SHOP is trying to develop a well guarded ecosystem (or has already done so)? What do you think the next step might be? For example, can they move into square's space and do so directly from their existing client base? Does their now massive cash horde suggest that they are likely to start some buying, presumably in niche areas that complement this move to full integration of on-line and brick-and mortar retailing? Thank-you again.
Read Answer Asked by Alex on May 14, 2020
Q: Good morning guys. Looking for your thoughts on earnings report today. Looks like a beat all around. Have been a little frustrated with stock price not participating in most recent rally. Also concerned about effect of physical distancing on funeral revenue. Thinking about stepping out of the stock for bit and maybe revisiting it again post Covid. Always appreciate your insight. Thanks. Chris
Read Answer Asked by christopher on May 13, 2020
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