skip to content
  1. Home
  2. >
  3. Investment Q&A
You can view 3 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Do you take downgrades with a grain of salt. There are constantly companies being downgraded. Does that mean if I hold a downgraded stock get rid of it because it isn't going to do much or when it goes down buy more? I hold TOY a recent downgrade and it has dropped off some - buy more, sell? Thank you very much Dennis
Read Answer Asked by Dennis on March 14, 2018
Q: Hello,

I was wondering what your thoughts are on RHT given it's current price ( ~$2.22 as of today). Based on the most recent share count outstanding (81,871,000), this suggests an EV of about $180 MM for a company that is showing 6 month revenue of $1.1 MM. While I know that early stage companies are based on what the future holds, I also like to keep an eye on what EBITDA needs to be (in the future) to justify valuations. For instance, in the case of RHT, if one believes that within the next 12-24 months they can achieve EBITDA of ~ $12 MM, then this would suggest that today it is trading at a EV/EBITDA multiple of 15 based on future results. EBITDA of $12 MM in turn is achievable if they can hit ~ $20.5 MM in gross revenue with a 78% gross margin (as per most recent financials) and no increase in cash expenses of $4.0 MM annually, as 6 month financials suggest ~ $2.0 MM in cash expenses. In short, does your modelling of RHT suggest/indicate that this is a realistic expectation, and that within the 12-24 month time frame they can reach ~ $20 MM in gross revenue with no margin compression and no increase in cash G&A costs ?

Thanks!
Read Answer Asked by Mike on March 13, 2018
Q: Hi 5i,

I received a notice of a tender offer for ECN shares. The offer advises that existing shareholders can participate by specifying a price between $3.49 to $3.90 per share as a Dutch auction. Can you clarify how this sort of thing typically works, versus just buying at the market price? I'm wondering if this is a good deal for existing shareholders. As of me writing this, the share price is $3.71.

Thanks!




Read Answer Asked by Elliott on March 13, 2018
Q: There was a report today on BNN about fraud in the automobile body shop business. It was admittedly a very limited 'sting' operation by Aviva but a disconcerting one nonetheless. I could not find any further detail on the Aviva website as to the body shops involved and I was wondering if you could find this information and, more specifically, whether any of them are part of the Boyd Group operation?
Read Answer Asked by richard on March 13, 2018
Q: I checked out Trevali Mining at the PDAC conference this week and noticed that it has over 800 million shares outstanding. Do you think this is a concern in the sense that they might decide to consolidate at some point. Also could you provide the fully diluted number of shares as well as recent insider activity and overall ownership. Thanks.
Read Answer Asked by Rob on March 12, 2018
Q: Hello, just want to ckeck with you if my calculations of the debt / cash flow ratio of Enb is exact? I obtain a ratio of 9.2 and here is how I get it using data from Tmx Money: Long term debt of 60.8 B / Net cash from continuing operations of 6.6 B = 9.2 ratio. If that is what you have, are we in dangerous territory? Thanks, Gervais
Read Answer Asked by Gervais on March 12, 2018
Q: Hi Peter and gang.
What do you think of ProMetic’s medical application and technology?

Secondly, does ProMetic have the financial strength to survive until they can turn a profit? I see analyst consensus is they won’t be profitable until 2020 / 2021.

Lastly, are there any 2018 red flags or developmental milestones we can be on the lookout for to monitor the viability of ProMetic as an investment?

Thanks.

John
Read Answer Asked by john on March 12, 2018
Q: Dear 5i:
Multipart Balanced Equity Portfolio question (please deduct credits as appropriate):
I have roughly $12000 to contribute to my RRSP (2018 contribution) right now, which four or five companies should I put this money in? Please exclude TECK, CSU, BNS, MX, PBH, and SIS in your response since I have full weights in these companies. I would much rather just add to positions to bring the weights of each position closer to 'equal weight', but this would involve averaging down (which 5i doesn't generally endorse). However, you have commented previously in the past that any company currently in the BE portfolio is 'buyable today'. So would averaging down be reasonable if one is only considering BE portfolio companies (for example, would be happy to average down on CLS/GUD if you think this is a reasonable move). I would far prefer to avoid individual security concentration risk by adding to other positions rather than trimming a winning position (regret trimming TOY, for example). Please provide your thoughts and guidance, and thanks as always.
Read Answer Asked by Walter on March 08, 2018
Looking for more? Sign up for a FREE 14 day trial! No credit card required

We invite you to sign up for a 14 day free trial of 5i Research!
Experience all the benefits and tools we have to offer; stock research, model portfolios, Q&A with our experts, and so much more. Join a community of like-minded investors today!