Investment Q&A

Q: SHOP was downgraded by RBC today. Should we be concerned.

Q: Good morning...your view of the letter issued by CSU CEO last night? What do you read into it? Does it change your view moving forward? Nay projections on growth of stock for the year?

Thanks

Q: Good morning...I have held syz for two years with a loss on the stock other than a dividend return but stock down 20%...I have held back on one of my rules of reducing exposure as you hold this company in high regard...I already own abt and it is doing well but am thinking of replacing one half of my exposure to syz with et...do you consider this a prudent move as I hold all of the balanced portfolio and parts of the dividend and growth portfolios and have had very good returns other than syz...I value your opinion in this matter and look forward to you reply...thanks for a great year ...gene

Q: CRIUS appears to act like a middle person in the sale of electricity and gas to residential and commercial customers. Would it not be advantageous for these customers to deal directly with the utility provider ? How can CRIUS compete with the utilities in terms of cost ?

Q: Whitecap Resources (WCP) is 3% of my portfolio. As I watch the price continue to fall, and analysts continue to have a "buy" recommendation on it, do you think now is a good time to increase it to 5% of my portfolio?
Thank you

Q: Hi
You seem to continue to hold RRX in high esteem. With the price now down around the $8 level, do you see this as a good entry point? I have no other energy stocks at this time.
GUY R

Q: With a decline in price my holding has gone down to 2% holding. Would you recommend buying more to bring the holding back to 3%?or just wait until the next earning report? You mention that you like to buy more when a stock is going up in price and momentum is going up.
Thanks

Q: Does CRH report earnings before the open of markets, during the day, or at the end of the day after markets close.

Q: Is this a good entry point for a long term hold of itc? 2-3 year time frame

Q: Is Stella Jones affected by the recent tariffs on softwood lumber? Thanks.

Q: So last night Motley Fool Canada took down their article from yesterday that was bashing CRH and comparing it to Valeant. Then the author releases a new version of the article that is actually promoting CRH for the most part. I did notice in the original article that they listed Motley Fool (US) as owning the stock which struck me as odd. I wondered why Motley Fool would bash a company, contributing to its decline while its parent company is long the stock. Feels like maybe the author got a big slap on the wrist and was forced to instantly retract the article? Very weird.Would there be any legal implications there, seems like manipulation. They are bashing a stock one day, and pumping it the next.Not that I had any respect for Motley Fool but I've defintitely lost the little I did have for their stock reports.

Q: The term Core Holding has come to my attention recently in both your Q&A and an analyst report. It makes me think is there a list in your head of companies that would represent a core holding in a portfolio of Canadian Equities? Or is this kind of your balanced portfolio?

Q: Hi
I have some new money to put to work. Which three names in the growth portfolio would you suggest buying at current levels?
Thanks,
Curtis

Q: Recently I asked a question about Crius "Where are the earnings?"

You replied on April 19th that "Crius made 44 million last year." I had hoped for something more detailed but I obviously should have asked a more detailed question.

To that end, Crius lost 74.9 million the year before (2015) although part of it was one time. If you combined the two years, the payout is hardly 60% of earnings.

My questions are:

1) Has Crius had positive earnings in years prior to 2016? I understand it's a relatively new company and a series of losses aren't that unusual.
2) I feel that you think Crius has turned a corner at this point and 2016 will be more typical than 2015. If so, could you explain your reasoning. I'm considering an investment.

Q: The company is releasing earnings 2 months after the last release and not the usual 3 months. Is this a concern? Thank you.

Q: Being only a few days from earnings release. Wouldn't CRH management be in the blackout period? Releasing a short report when management potentially cannot respond (not sure about this), would that not technically be a violation of the CFA ethics code of conduct under market manipulation? Would this not trigger some kind of review by the CSC or another regulator for taking advantage of the inopportune timing?

Q: With CRH down drastically two days in a row on two short reports, management has not made a response which leads me to believe these reports are probably true which will result in a poor earnings report. Shouldn't they have responded. Your opinion please. Thanks

Q: Hi Peter and Team,

Could you please comment below The Motley Fool's analysis about CRH.
"CRH made three acquisitions in 2016 for controlling interests of anesthesia companies with two of the acquisitions for 51% of the targets, and the third acquisition for approximately two-thirds of the business.
Because CRH now owns more than 50% of these companies, it is able to include 100% of the revenues and earnings from these firms on its balance sheet, boosting total earnings substantially while distributing only approximately half of the acquired value to shareholders.
On the bottom of the financial statements, we can see that net income “attributable to shareholders” was $10.6 million in 2016 and net income “attributable to non-controlling interests” was $5.5 million, meaning more than a third of the net income produced by CRH in 2016 is not attributable to shareholders of the company.
It is important to differentiate the two; looking at the financial statements from a high-level perspective, the numbers may seem impressive, and the growth rates often stated on press releases or in the media may make investors wonder why they didn’t pick this “growth gem;” however, the numbers used are clearly artificially inflated by more than one-third, and the overall indebtedness attributable to shareholders is more than one-third higher.
Shareholders who are not careful to take note of the adjustments may be disappointed when they understand that their overall equity as a percentage of the total company is actually shrinking.
The percentage of net income attributable to shareholders has been decreasing at an alarming rate due to the manner in which CRH is completing its acquisitions. As of Q4 2016, over 45% of the company’s quarterly net income was not attributable to shareholders, meaning in 2017 investors can expect to cut most of the numbers shown on the financial statements in half for the sake of accuracy."

Thanks

Q: How to catch a falling knife and when do you know it's hit the floor?

In your opinion, considering all the media, short attack pirates, and the massive volatility that have come to life so quickly. How would you play picking up CRH medical? I see technical levels at 7.99 for different measures as a resistance level. Or perhaps it would be prudent to spend time on the sidelines and watch this one. Or would it be best to watch the moves of institution buying as a sign of confidence for those who have done their homework vs. stop losses begetting further selling? I see this company as having a lot cleaner financials, so I don't feel too worried taking a small position at $8.00.

Q: I realize you guys have to be diplomatic, but the rationale that the shorts (different people in each case, by the way) were right on other stocks so they are probably right again is laughable. And it should be pointed out that just a month ago Motley Fool (not exactly the cream of the investment crop anyway) issued a very positive report on CRH.
http://www.fool.ca/2017/03/22/investors-forget-valeant-pharmaceuticals-intl-inc-check-out-crh-medical-corp-instead/

Thanks,

Alex