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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: I have had the impression rightly or wrongly that you aren’t buying into the current narrative that interest rates might stay higher for longer? Just supposing they do stay elevated for some time, are there any companies in your universe that you may have been previously positive on whose debt levels might give you pause under the higher for longer scenario? I’ll use EIF just as an example. Is it something you could run a screen on just to highlight some companies that you think could bear a closer watch under such a scenario? It always seems to me that when a company has an issue (Nuvei being a recent example), it’s always a suddenly too high debt ratio that ultimately takes them down (or at least keeps them from recovering). Appreciate your thoughts as always.
Read Answer Asked by Stephen R. on August 23, 2023
Q: If you held the following smaller cap stocks in positions of 0.5% to 1.0% of your total stock portfolio, and wanted to reduce the number of holdings by selling several of them and using the money to add to others, which ones would you sell and which ones would you add to: ACQ, ADEN, AEP, AND, CHW, CJ, DCM, ECN, GEO, HPS.A, LNF, NOA, PRL, QIPT, RCH, RET.A, SFC, STLC, SVI, TVE, WELL, XTC. Assume overall portfolio is well diversified so sectors not a consideration, and that this is the riskier part of portfolio, so, higher risk is fine. Would be great if you could pare this list of 22 stocks down to about 10-15. Thanks.
Read Answer Asked by Dan on April 24, 2023
Q: I noticed something in your answer to a question asked by Dan (not me) on Mar 10th about AutoCanada (ACQ). You said that ACQ has $1.9 billion of debt and that it was a major concern. Looking at their financial statements and the press release pertaining to the quarterly report, I think some clarification is in order. In the press release, ACQ states that their net indebtedness is $443.8 million at year end, and that, quote:

"our net indebtedness leverage ratio1 of 2.1x remained well below our target range at the end of Q4 2022".

Quite a substantial difference between their number and the $1.9 billion you mention. Looking at the financial statements, the difference comes from your number including the floorplan financing of approx $1 billion, which is something dealerships use to finance their inventory and is paid back as cars sell, and leases of approx $500 million.

Management seems to feel their debt levels are OK. Wondering if your comment that the debt is a "major concern" is somewhat overstating things.
Read Answer Asked by Dan on March 13, 2023
Q: Hello Peter,
CAn you comment on Auto Canada's results and whether you think it is worth holding? Also, if not, what is a better stock to buy to replace it.. ATS automation, Aritzia or CareRx Corp. Lastly what is the best site to get estimates? I use Yahoo but i dont find it matches up to what you provide.. Can you please point to a link that would have correct estimates, and lastly when estimates are provided, is it assumed they are adjusted EPS? Thanks for the service.
Read Answer Asked by umedali on November 11, 2021
Q: Hello,
I thought Nvei's results were very good. Why is the stock tumbling? Would you add at this time to Nuvei for full position of 5 percent? What are your thoughts on ATS automation and Trisura and Auto Canada for longer term? Also with big push on EVs, would it be a good time to buy NFI? Thank you for the service.
Read Answer Asked by umedali on November 09, 2021
Q: HI
one of the articles in the Globe and mail financial page indicated that next year; there would not be enough supply to the used cars for sale
I already own MG and Linamar, I wonder what other stocks would be a buying opportunity based on the above imbalance of the lack of supply for used cars to
consumers, ACQ has gone up alot in a year
thanks
Michael
Read Answer Asked by Michael on August 06, 2021
Q: Hi , please rank their short and long term growth potential . thanks.
Read Answer Asked by victor on June 25, 2021
Q: looking at to buy a stock in auto industry.
your preference re linemar, magna, martinrea, or wd buying a sales of autos co., ie, auto canada be better. your opinion and any other view/suggestion wd be helpful and appreciated
thank u
John
Read Answer Asked by John on April 12, 2021
Q: Similar question to the one I asked yesterday. This is regarding some small/medium sized consumer and consumer-related type Canadian stocks. How would you feel about holding each of these stocks in your portfolio, on a 1-10 scale, with a 10 being you definitely want the stock in your portfolio, a 1 being a stock you want no part of, and a 5 being a stock you are basically indifferent about. As part of broadly diversified portfolio, looking for total return over the next 5+ years, comfortable with risk. ACQ, AW.UN, DOO, ECN, GOOS, HTL, LNF, MTY, SIS, SVI, ZZZ.
Read Answer Asked by Dan on March 12, 2021
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