Investment Q&A

Q: Hello,
May I have your opinion on selling part if my Amaya (3%) and Boyd (7%) positions to purchase Premium Brands. As I am over in consumer discretionary and hold only a 2% posit in Saputo in basics. This would bring basics up to approx. 5% and discretionary down to approx. 16%. I also hold aw.un, bpf.un cgx dhx.b and gsy. In your opinion is there a better rebalancing option?

Your input is much appreciated.
Brian

Q: Hello Gentleman

I presently hold a half position in MG in my cash account. While recognizing it is a good holding, it seems to be rather flat of late. I am considering selling MG and replacing it with BYD.UN.

I am a conservative investor with a well-balanced portfolio. Your thoughts please.

Thanks.

Q: I have done very well over the last few years with New Flyer & Boyd. What do you foresee in the short term for both of these companies?

Q: Looking for your comments on Boyd's recent results. Thanks

Q: What is the Q2 consensus for revenue, adjusted ebitda and adjusted earnings?

thx

Q: I have held this wonderful stock for the last 4 years and am very reluctant to make any changes. However it has become a fairly large position in my equity portfolio i.e 11%. What are the risk/rewards comparing it to an AQN or SIS which are on my radar ( i know they are in different sectors). What would be a comfortable level in a portfolio bearing in mind that I remember you guys suggesting a few years back that a good company should be held indefinitely.

Thanks

Peter

Q: My 22 yo son recently opened an RSP. I wish to invest in one stock in his RSP (limited $ at this time - his TFSA is in order). I believe that good companies seldom/never come on sale. Given the concept of capital preservation for RSPs, cannot use cap loss, very long time horizon, etc, I like the 3 companies identified, and am open to others. There is no need to shoot the lights out - slow and steady will win the race.

Can you see any difficulty with any of the 3 companies I have it narrowed down to, and is there one or two others I should consider (don't care for securities like SH in RSP).

Thanks in advance. Bob

Q: I am interested in starting a position in this company. Just wondering what stock symbol to use--- BYD.un seems to have much lower volume that BYD.DB.A.

This company seems to be having great success by consolidating small family owned units into the Boyd family. Is there another stock that comes to mind that is successful with the same approach ?

Q: Hi, looks like, Boyd Group had another strong quarter. Could you please comment on the earnings release ? There was a mention of softness in Q2, due to warm weather. Should it be a concern ? Thanks

Q: Hi, could you please provide the street estimates of Revenue, EBITDA and EPS for PBH, BYD.un and NFI. Thanks

Q: Of my Industrial holdings, I currently own WSP, BYD.UN, XTC, and MG. Industrials are about 15% of my portfolio overall, which I think is decent, but am wondering if having BYD.UN, XTC, and MG carries too much exposure in the auto industry. Is there ever such a thing as too little diversity within a section?

Q: Good Morning, Your ROE calculations show a 5yr average of -4%
in the report. Scotiabanks research shows an average of 29% ROE.
Why the huge difference? Thanks Gordon

Q: What do you think of Boyd's quarterly performance? Is it a buy at this stage or you think it is expensive? If I remember correctly, it used to be in the 5i portfolio some time back?

Q: Hi, could you please comment on Boyd Group earnings released this morning? Looks like company beat on revenue and EBITDA and just met the earning estimates. Did you note the FX impact on earnings/revenue? Company is projecting to double its revenue over next 5 Years. How do you relate this expected future growth to today's valuation ? Thanks for your valued insight, as always.

Q: Good morning Peter and Team,

I came across a website listing "Canadian Dividend Aristocrats"
http://www.topyields.nl/tsx-canadian-dividend-aristocrats/

Looking at the Payout Ratio column, I see that negative and over 100% payout ratios are shown in orange, and I was surprised to see BYD.UN with a payout ratio of -26. My understanding is that a negative payout ratio means that a company is losing money while still paying a dividend. Surely this isn't the case for Boyd - one of my stellar performers! Could you please clarify? Even ENB shows a payout ratio of -534 (!) which seems absurd. Is it possible that the data on this website should be taken with a grain of salt? Finally, could you please recommend a website that shows (hopefully) accurate payout ratios, if in fact the ones shown on this site are incorrect?

Thanks for your continuing advice, recommendations, and learning opportunities.

Q: I noticed that BYD.UN is listed in the Financial sector. Is this correct? I would have thought this was more of an industrial or consumer sector.

Q: Hi,
In further response to Michael's question on Boyd, the analyst's report on Boyd that you mentioned essentially said that Boyd was over-valued.

The following is an excerpt of that report, but please post only if you consider it appropriate to do so and feel free to redact the size should you choose:

Future EBITDA growth for Boyd Group Income Fund (BYD.UN-T) is "set to slow from very high levels as large acquisition opportunities become more scarce," said RBC Dominion Securities analyst Ben Holton.

Cautioning that the open-ended mutual fund trust's valuation is currently near the high end of its multi-year range, Mr. Holton said he's "sensitive to the risk of multiple compression." He initiated coverage with a "sector perform" rating.

"BYD has been consolidating the North American auto-collision-repair market, and has more than quadrupled its revenue base since 2010," he said. "However, we expect the pace of acquisitions will slow, and with it, the pace of EBITDA growth."

He added: "The roll up of Multi Store Operations (MSOs) has driven consolidation in the industry, but these opportunities are becoming more scarce and more expensive. The slowing of this growth channel is significant as 70 per cent of the stores BYD added since 2009 came directly from MSO acquisitions. We believe organic growth will remain strong and single store acquisitions will accelerate, but are unlikely to make up for the decline in MSO activity. Further, the foreign exchange tailwinds benefiting 2015 can’t be counted on in future years. Specifically, we forecast revenue will grow at a 13-per-cent [compound annual growth rate] and EBITDA at a 16-per-cent CAGR over the next five years, still solid, but a significant deceleration from the 35-per-cent and 40-per-cent respective CAGRs seen since 2010."

Mr. Holton set a price target of $72. The analyst average is $77.22.

"BYD is trading at near record forward multiples, which we believe is at odds with our forecast of slowing growth," he said. "Accordingly, we see the risk of multiple compression. Specifically, BYD has traded in a range of 10-12x [next 12 months] EBITDA since mid-2013, though through this period BYD was growing EBITDA at a pace of [approximately] 50 per cent annually. Through this period, we also believe investors were paying up for potential MSO acquisitions that were not explicitly in forecasts. BYD is still trading at the upper end of this range, despite forecasts for slowing growth as MSO acquisitions become scarce."

Q: I would appreciate your comments on Boyd's earnings release issued this morning. Thank you, Peter

Q: Boyd down over 10% on the day and still falling. What is going on?

Q: What do you think of Boyd's inclusion to the S&P/TSX Composite Index announced yesterday? I thought this would be a positive for the stock, but it's off ~4% since the news release.