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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: Hello 5i Research team,
I am always suspicious when a company does not provide or comment its quarterly results in its press release. As I do not think there is some seasonality, I am comparing q4-17 vs q3-17 : quarterly revenue growth dropping from 58% to 27%; gross margin dropping from 54% to 36%; sales and marketing as a % of revenue increase from 14% to 22%; administration as a % of revenue increase from 19% to 30%; operating cash flow before changes in working capital was negative 0,2 M$ vs positive 1,5 M$ for the first 9-months.
Echelon forecasted 2,8 M$ in revenue, 0,6 M$ in EBITDA (very large miss). Could you comment on my analysis? Could you comment on management and board members quality and credibility? Is it a classic case of a growing company having some growing (pains) expenses before some more revenue growth or is this the first signs a management team that is bad at manage expenses? With a year-end of September, the stock has been under presssure since mid-October, it looks like some knew about weaker results, and traded. Would you agree that trading looks suspicious since mid-October? Is PTE still worthy of being included in your growth portfolio or the small cap basket allocation of your clients? Immediate sell order or they invested for future growth?
Thank you for your collaboration, Eric
Read Answer Asked by Eric on January 18, 2018
Q: Hello Peter.
Just read your Post article and looked into current losses for pruning. My losses are the four highlighted.
I have a sense however that it is too early to prune the small caps(ITC, GUD and PTE) since I have held them for very short duration; not even a single earnings report. And it is likely a good idea to hang on to CGX given its monopoly position and new slate of movies generating Buzz.
I continue to hold CPG for the now 3% dividend and hope of investors returning to Canada and CPG.

Except CPG, all the losses are small $ value as I was only beginning to step into each of the small caps as they tumbled........(and all the losses are in registered accounts)

Would you allow these names to be included in the new years clean up or give them more time to let current themes run their course; current oil price movement for CPG and business execution for ITC, CGX, GUD and PTE?

Thanks
Dave



Read Answer Asked by Dave on January 08, 2018
Q: Thank you for your kind answer to my earlier question suggesting PTE,AVO and GSY.
Any sub 5 dollar stocks, other than ECN/GUD? I bought ECN, again reading your Q&A section! GUD is above 5 bucks but bought it anyway as it was your top tax loss selling candidate.
Thanks in advance.
Read Answer Asked by Savalai on January 03, 2018
Q: I am looking for low priced high growth Canadian companies that I want to buy in TFSA in the new year. Volatility, risk factors are NOT relevant. For about 11k. (5500x2) I bought PHO and BBI after reading your responses to some of the subscribers in the Q&A section. Any other names that you would suggest? ( Being seniors our core holdings are in the ETFs in different sectors and safe stocks like XIC, VDY, VIG,MGV,XEG,GLD,XGD etc., ). So, this 11k can be allocated to risky micro or ultra micro caps and I am ok with some losses if I can score a few three or 4 bangers!
My membership has been extended to March 2020 which shows my confidence in you! You need to find a way to synchronise my CMS and 5i subscriptions though!
Wish you all Happy, Healthy, Peaceful and Plentiful New Year!

Thank you for all your prompt, thoughtful and candid answers to such varied questions from so many different type of members.
Truly amazing.
Mano.


Read Answer Asked by Savalai on December 29, 2017
Q: Hey, thanks for your great service.
I'm looking for few companies that I can invest on tsx venture. Any upcoming companies that are doing very well?
Read Answer Asked by Mohammed on December 11, 2017
Q: Peter,
In what order would you add to the above smaller positions today ?
Any you would outright sell today ?
Thank you, Paul
Read Answer Asked by Paul on November 23, 2017
Q: Following up on recent questions about PTE.
I am also very surprised by the share price weakness. Since hitting a high of $1.50 it has continued its growth path, paid off debt, signed record sales deals, had coverage initiated, been featured on several subscription services, and been subject of discussion on market call numerous times. Yet the stock seems to have lost its steam.

I realize being discussed on BNN shouldn't be a metric but it seems like PTE was on the brink of being 'discovered' only to have the stock price decline while the company continues to perform.

Are you able to comment on any recent institutional or insider buying/selling?

Thanks.


Read Answer Asked by EVAN on November 14, 2017
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