Investment Q&A

Q: Hi Peter, Ryan, and Team,

In our combined portfolio (RRIF, RRSP, TFSAs, and non-registered account), we are underweight in Information Technology. 5i's latest recommendation for this sector's weighting is 15%, but we are at 13.4%.

We hold these stocks/ETF followed by their weighting:
CSU: 5.67%
ENGH: 2.38%
KXS: 1.09%
OTEX: 2.50%
SYZ: 0.92%
XIT: 0.91% (We use it to park cash as it's a commission-free ETF for us)

My wife has a preference for holding dividend payers (even a small dividend) in her RRSP. In her RRSP, she holds a 1.51 % position in CSU, and the full 2.38% of ENGH. In order to increase the IT weighting to 15%, she needs to invest $19,500. There is sufficient cash in her RRSP for this purchase. What course of action would you suggest? Should she top up her position in ENGH? Or should she start a new position in ET or OTEX?

Please deduct sufficient credits for this rather convoluted question. Your guidance is very valuable to us.

Q: I own the above companies with the following corresponding weighting:
2.6%;1.3%;2.2%;2.5%;2.7%;2.2%. I am looking at the possibility of doing some consolidating - what are your thoughts on consolidating? If I consolidate - what 1 or possibly 2 companies would you eliminate and what 1 or 2 companies would you add to?
Use as many of my questions as you need and thanks for your excellent service.
RAM

Q: Re Jordans question on syz. They announced on Sedar May 1st "The Company is pleased to announce it will be releasing its second quarter financial results before the market opening on May 15th, 2019. ".

Q: When do they report? They never seem to announce a reporting date.

Q: Would you be so kind as to provide your interpretation of Sylogist’s May 1 news release as it pertains to any possible positioning of the Company to merge or be acquired. Specifically, am I reading too much into the sections of the news release that talk about (1) senior executive contracts being negotiated to address …change of control provisions and (2) senior executive efforts will be focused on M&A activity to realize industry peer comparable value for our shareholders.

Q: Hi, Sylogist Board passed some important resolutions on May 1. Could you please help us understand its significance as an investor. Thanks

CALGARY, May 1, 2019 /CNW/ - Sylogist Ltd. (TSXV:SYZ.VN) ("Sylogist" or the "Company"), is pleased to announce the results of its Annual General and Special Meeting held on May 1, 2019 and the directors election of a chairman and committees for the ensuing year. In addition, the Company is pleased to announce the Board of Directors today approved a comprehensive plan to improve shareholder value through increased financial performance, M&A focus, enhanced board governance and accelerated growth initiatives.
Growth in Shareholder Value Initiatives:

- The Board directed management to complete a rigorous Company operational review, to target annual savings through workforce efficiency gains resulting in reduced annual costs of $1.8 million over historical costs. Much of the review conducted to date has focused on the impact of a mobile workforce. Today, over 80% of Sylogist's workforce has a mobile component to their employment. The impact of a mobile workforce reduces the need for fixed office space, administrative support, certain sales costs and travel time, while promoting a borderless workforce and improving employee work/life balance. Through the flexibility provided by a mobile workforce we are able to cover multiple time zone support and professional service commitments, with a more streamlined employee base. Functions, including software support, some software development, sales, investor relations and professional services, historically requiring extensive travel for face-to-face meetings, are now largely addressed with technology conferencing tools. This means we can now hire the most talented people who can be located where they want to live;

- A number of organic growth initiatives are commencing in the second half of fiscal 2019 with financial impact expected in the fiscal 2020 results. Projects previously noted include a new payroll platform and North Carolina education market opportunities:

- The Company is currently testing a pay-per-use payroll platform and will start rolling this service out to customers in Q3. Effective by the end of June, the payroll platform will be supplemented with an employee perks benefits system. The perks system provides employees with tax effective benefits that well exceed the employers' cost of the payroll system, making the economic advantage of selecting a pay-per-use platform an easy decision;

- Sylogist was not, at this time, selected for a master service agreement with the state of North Carolina Department of Public Instruction. To date, two larger organizations have been awarded agreements to compete in the North Carolina market once they pass a number of hurdles, including state compliance. The Department of Public instruction has, however, agreed to fund customer upgrades for the modern K12 certified solution. Given the lengthy process ahead for the new entrants' certification, testing and piloting of new system offerings, the timeline for selection and early implementation of replacement systems has been extended by 4 years or more from the original plan. The current plan leaves Sylogist with a much longer runway of continued support for its legacy system and funding for upgrades to its modern K12 system. The Company has adjusted the forward operating parameters in the business to address the current situation and these changes result in projected increased profitability over an extended period of time. On a financial basis the Company is very pleased with the developments in this market to date.

- Sylogist is pleased to announce the recent signing of a $3M (CAD) professional services contract to implement Sylogist's Navigator solution in multiple international locations for a large not-for-profit organization. Discussions are underway with the customer toward a meaningful increase in scope and duration of this contract.

- Senior executive efforts will be focused on M&A activity to realize industry peer comparable value for our shareholders.

The Company is pleased to announce it will be releasing its second quarter financial results before the market opening on May 15th, 2019.

Q: Hi, Could you please post earning estimates for Sylogist. Thanks

Q: Hi guys, thanks for the excellent service and continued improvements. I find the new Portfolio Analytics section very helpful. Long winded question here so please deduct as many credits as you see fit.

I am overweight in tech, at 40% overall. I have 40% tech in both my RRSP and TFSA.

The biggest names I have are AAPL 9%, TEAM 6%, and NVDA 6%. All of those are held in the US side of my RRSP.

I have a mix of 15 stocks in my TFSA, roughly equal weighting. The tech holdings in there are PHO, KXS, CSU, SYZ, SHOP. Each comprises about 6% of the TFSA but just over 1% of overall holdings.

I am 7-8% underweight in:
consumer defensive,
communication services,
industrials,
utilities.

I feel I should trim back or sell at least one of AAPL, TEAM or NVDA but hard to given they have all been growing and have potential to grow further. Are there any obvious choices to cut or pull back here? Can you please suggest at least one name from each of the following sectors:
consumer defensive,
communication services,
industrials,
utilities.

thanks !
Mark

Q: Was there ever news about its partnership with Microsoft?

Q: When do they report? What are expectations?
They have been quiet, and I like adding to companies in situations like these. Risk/reward prior to earning I think it quite positive. Thoughts?

Q: SYZ has been moving slowly downward the past while. Anything to be concerned with? I realize it's a low volume trader and more volatile. What will it take to kick start the stock?

Q: I have 2% position of SYZ in my portfolio and with this stock failed to gain any traction, and also dropping almost daily (I'm down 10% so far overall), would it be advisable to just sell it for a small loss and move on? Your recommendation is much appreciated.

Q: Hello Peter, Ryan, and Team

I need to raise some cash and would like to know how you would rank these stocks from "sell first" to "sell last":

BLX 1.07%
BNS 1.9%
KXS 1.35%
NFI 0.81%
PBH 1.7%
SIS 2.22%
SYZ 0.94%
TFII 0.58%

I am underwater on all of these. The number following each symbol is the stock's weighting.

Thanks for your assistance.

Q: I didn’t see Syz in any of the portfolios, is it removed from the list? Thanks

Q: At the present time I have a full position in Kinaxis, Constellation Software, and Shopify.
All 3 are in a non registered account. CSU and SHOP have done very well but KXS has been falling over the past year and I was wondering about selling it and buying one of the other 4 that I have listed. I am looking only at growth over the next one to two year time period. My risk tolerance is moderate to high. Which one would you suggest and why. Or would you just stay with Kinasix. Please deduct as many credits as you see fit. Thank you, Ian
Did

Q: At the present I have a full position in SHOP and CSU. I would like to add another full position to my technology sector. Which to the above 5 stocks would you suggest for
growth only for a 1 to 2 year holding. My risk tolerance medium high. Could you please rank them from most growth to lowest growth and your reasons. Please deduct as many credits as you see fit.
Thank you Ian

Q: I was just about to buy CSU when I noticed a good report and it shot up 12%! Is it too late? I'm looking for two long term holds, minimal volatility, for a 2.5 % position each. What two do you like and why?

Q: Hi 5i team,
Following my reading of your updated SYZ report. About the strategic partnership with Microsoft that has an end date set in August 2019: when can we expect SYZ to make an announcement if renewed, or renewed with modifications or not renewed (different date?)? What could be the impact of a « no renewal » on revenue, earnings and stock price?
Thank you for your collaboration,
Eric

Q: Any insight with management at SYZ? I can not find any reason behind the precipice drop over the last few days. I totally got it wrong and bought recently only to watch it fall off a cliff. I am out now too wild a ride for me. I am questioning whether your small caps are worth holding in these markets, no one gets them all right but this is getting painful.
Still listening but wondering if some of your response should take what seems to be a terrible space for cdn small caps into consideration and few more get out while can responses would be in order. lol ..sort of...rant is over.
Bob

Q: Hi, Could you please comment on the 1st quarter earning release of Sylogist, this morning. Thanks