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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: Follow the money. The company has been aggressively buying back shares during the past 12 months. Then there is very large insider selling by the the CEO followed by earnings that were poor and the share price is well below where most of the share repurchases occurred. If the company knew they were in a transition year (stated in their q release) and earnings were going to slow or falter should they have been buying shares back at 9-11 bucks? Or waiting till after this weak quarter to buy back shares at much better prices. Looks to me like the CEO is taking care of himself and not acting in our best interest. Your thoughts?
Read Answer Asked by Joel on February 23, 2017
Q: Hello Peter and 5i team,
We were surprised to learn that TIO networks is being bought by pay pal. At an 86% gain we are very happy. Thank you for the recommendation. At the end of the month we will sell our holdings. It is in my wife's TFSA. Her current holdings are ET, KXS,GUD,LNR,SJ, and SYZ. This is our growth account as we have appropriate holdings of large caps and fixed income in our other accounts. In your opinion what would be a good addition to our current holdings or would you recommend adding to any of our current holdings?
thank you for the great service
Read Answer Asked by john on February 21, 2017
Q: Hello 5i
Would you please offer thoughts on Sylogist given we seem to be in a price decline phase - starting with an uptrend break in Sept-16?
Sure feels more than just drifting when a stock falls so hard in a single day. The charts (1&5 yr) are showing a technically broken-down stock not firmly in a downdraft. Am I being lulled to sleep with 5i positive tone and 5 year hypothical viewpoint - when I should really be taking action to protect my Capital?
Thanks
Dave
Read Answer Asked by David on February 13, 2017
Q: SYZ continues to drop - is there something "wrong"? Is it time to bail (ie. "stop loss") and buy something whose stock is increasing such as SHOP? Selling low (SYZ) and buying high(SHOP)is often not a good strategy unless the low is going lower and the high is going higher. Your thoughts on doing this trade.
Read Answer Asked by David on February 09, 2017
Q: In reference to a question from Peter concerning Enghouse and Boyd, when or how do you determine winners(former?) are no longer winners? I have a few positions in which I have done quite well and despite nothing materially changing in the company, the stock price has stagnated or has been range bound for months.
I am reluctant to change companies just for the sake of change or to try to chase returns but often I am enticed by companies that seem to have momentum But this often throws off sector weighting?
Read Answer Asked by Marty on February 08, 2017
Q: Hi there Bought a bit more of SYZ after what I thought were excellent quarterly results. Since then share price has been dropping steadily. Other than inside selling any other idea why this might be occurring? Another question I pondered about was how an insider sold 500000 shares in a couple days when the stock is so lightly traded. Do you think that was a single block trade - a prearranged transaction?

Thanks

Stuart
Read Answer Asked by Stuart on February 06, 2017
Q: I'm overweight in Technology.
If you could only keep one the following companies,SYZ (Sylogist)
OTC (Open Text) and CSU (Constellation Software),which one of these companies would you keep and why?

Thank you
Read Answer Asked by Frank on February 02, 2017
Q: Looking through Sylogist's annual report I have a question for you about how you think they are running their business in regards to use of cash. Total Cash declined meaningfully (but was high to start) and the use of cash was largely to buyback shares. Cash flow from operations, when also considering the change in working capital, was roughy equal to the dividend payments. Therefore, the company seems to be betting against its ability to find future opportunities for investment (either organic or acquisitions) that provide at least an IRR at least equal to its current ROE otherwise it would be 're-investing' some of its cash flow back into the business would it not?

Also, I see comments in the member's questions indicating that insiders are buying? Is that truly the case or is it part of their incentive compensation scheme? Management bonuses and equity based compensation in each of the last two years was equivalent of all of the G&A expenses of the company. Do you know if anyone has analyzed the share purchases to determine if they exceed the equity portion of the insider compensation?

Cash and use of cash by insiders is so important to understand. Thanks in advance for the response and, as always, the good work.
Read Answer Asked by Derek on January 26, 2017
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