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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: We have a bond that matured and want to invest in another bond in the RIF which is mostly fixed income. Have XCB and 8 or 9 individual bonds in that account. In the context of which one of these is the safest (most likely to be around to pay the principal back at the end of the term), which one would you pick.
Precision Drilling 15-mar-2019 6%
Sirius XM 23-apr-2021 5.4%
Great Canadian Gaming 25-jul-2022 5.65%
Crombie REIT 30-sep-19 4.3%YTM
Read Answer Asked by Ian on February 09, 2015
Q: My question is about Great Canadian Gaming Inc. (GC).

In your recent report you gave this company a B rating. I am trying to understand how this came to be. I most definitely do not understand something as I do not see this in a positive light (but you have proved me wrong many times and I am trying to learn). The following is what I have read in your report.

- The company pays no dividend and has high debt.

Additionally, reading the section on "Recent financial results" the following stood out when I read it.
- For the 9 month period, revenue was $305.9 million, basically FLAT compared to the prior period.
- These arrangements are NOT as attractive as the previous ones and overall revenues have DECLINED from these facilities.
- Boulevard also produced REDUCED revenues due to proximity of highway....
- These negatives were offset by IMPROVEMENT in the other casinos, notable River Rock (sounds like we're putting our eggs in one basket)
- For the 9 months, adjusted net earnings were $34.9 million, DOWN 4% from last year.

Additionally, I do not believe that I read about much growth. In the "Growth" section of the report.
- Growth can come from the of new sites, BUT this ability to grow is strictly controlled by provincial/state regulations.
- The Ontario Lotto and Gaming Corporation is evolving its operations in Ontario which MAY present opportunities for GC.

Overall, what I feel I read is that the company pays no dividend, has lots of debt, its financial numbers are flat (if not decreasing), growth is a possibility (however it is out of the companies control) and there are "exceptionally tight regulations and any violations are met with strict penalties, ...". How would this be a "B" company? Especially if we also consider that the stock has already had a run up.

I have missed a number of your great stock opportunities due to my incorrectly questioning your analysis. This time I thought I would ask before writing it off for other opportunities.

Thanks again. There is no rush to respond to this question. It can go at the bottom of the list.
Read Answer Asked by Walter on December 30, 2013
Q: Thanks for the update today on Great Canadian (GC). I am looking for some exposure to the gaming industry. This may be comparing apples to oranges, but of the three companies that you follow(GC, GH, AYA), which would you consider the best investment given that only one of the three pays a dividend. Or perhaps a small bet on each of the three.
Thanks, Chuck
Read Answer Asked by Chuck on December 20, 2013
Q: I was looking at aya, boyd and GC. Aya is in your model portfolio but the other 2 seem to have much smoother charts with gc having really taken off lately (perhaps too much?) Would GC be more steady as it has casinos in both Canada and the US? What are your thoughts on these three companies? Is aya in the portfolio because of the dividend?
Thanks for your advice.
Read Answer Asked by Colin on December 08, 2013
Q: Hello Peter.
Great Canadian Gaming (GC) has announced agreements in principal with regards to Georgian Downs and I see this as a positive. However it looks like renewal terms may not be as lucrative as before. Combine this affect on projected decline on EBITA but re-evaluation of writedown of this asset and now I am confused.
Is this going in an ok direction and how significant /material are these recent news releases.?
Thanks John
Read Answer Asked by John on March 27, 2013
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