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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: Lots of concern regarding this company and want to get an idea about how to handle the dramatic drop in share price. If you were a shareholder that bought in at say 9-10$ range would you think any differently about the company than you would if you bought in at 2-3$. I notice that when any high flyer has a hiccup, your answers are generally to "hold for now" and that the "stock is up 140% from last year". We certainly were aware of the risks with this company and should not be surprised that some investments just won't work out. It's easier to "let go" if your gains dropped back to near your purchase price than if your losses are nearer to 75%. Any lessons learned or is it still too early to give up on XBC?
Thank you for any comments
Read Answer Asked by Rudy on March 17, 2021
Q: Hi,
Have a 1.55% position now, avg price $5.36. Had a nice double on it before but down now, which is disappointing for sure. It's closing in on that $4 price which you were concerned about breaking. What are the different scenarios you see playing out come the March 24th full release? Can you give any insight on what additional or further news could impact the stock either up or down going forward. Thanks!
Read Answer Asked by Keith on March 17, 2021
Q: Risk tolerance in TFSA high. Both spouses are vested in defined benefit pension. 5 to 15 year timeframe. I am thinking of slowly adding to existing XBC position and initiating MITK position. Would you suggest waiting until after XBC reports? I worry a good buying opportunity will be lost if we don't add to that position in advance. Do we have a timeframe around the MITK legal situation?
Read Answer Asked by Joel on March 16, 2021
Q: A general comment in response to the flurry of questions pursuant to XBC's recent declines. I, too, have taken a paper hit on XBC (down by half). But I went in knowing the risks and am playing the long game. This could turn out badly, or not. But it is part of a well-diversified portfolio, so the one hit is tolerable.

I'd like to remind fellow members all stocks have risks, and 5i to its credit has been consistent about potential risks of XBC and the view that it is a longer-term hold. Below are quotes pulled from 5i's December 21, 2020 Review (Report), followed by answers to some recent questions from members.

REPORT

"Xebec has customer concentration risks with five main customers accounting for ~40% of Xebec’s total revenue."

"...XBC faces risks associated with volatility of oil and natural gas prices as many of Xebec’s customers rely on the sale of natural gas."

"While the stock can see severe volatility in any short-term period, we think XBC is a name in the renewable energy space that has the potential to reward patient investors over the long-run."

"B+. Fundamentally strong. ... Good for the long-term, but some risks exist."


ANSWERS

Feb. 11, 2021 to Garth: "We like XBC's prospects and growth. It is still quite high risk and the higher valuation today adds more."

Feb. 1 to Ilie: "We think XBC has room to run from here, but we would take a long term approach."

Jan. 26 to Warren's question in which he states he's looking for growth and has high risk tolerance: "We would consider ... XBC..."

Jan. 21 to Kay:
"...would be fine buying XBC today with a long term view."

PS: I'm a paying member as everyone else and have no relationship whatsoever with the company or any of its owners or staff.
Read Answer Asked by Marc on March 15, 2021
Q: Hi Peter, Ryan, and Team,

Sorry for yet another question about Xebec. I realize that stocks in the growth portfolio are by nature quite volatile, and since this holding is in a TFSA, and XBC closed today (Friday) with a loss in the account of 36.6%, we're wondering (based on your long experience in bull and bear markets or when a particular stock runs into difficulties), what kind of timeline we 'could' expect to recoup this loss.. We're aware that the 'green' sector, of which Xebec is a key player, stands to benefit from environmental initiatives and programs from different governments, including our Canadian regime, and the Biden administration, among others. However, since Xebec's problems appear to be somewhat company related, what advice can you offer? I should add that we both are fortunate to have defined-benefit pensions, and don't need the TFSA funds, but it's certainly gut-wrenching to see such a loss in one day! Your guidance is always greatly valued.
Read Answer Asked by Jerry on March 13, 2021
Q: Friday morning 9:40am and XBC is down heavy based on pre-announcement of sales decline. XBC has been touted as one of 5i's top growth stocks. But things happen. In earlier question today you replied that you would have to do more work on this. How and when will this new information be passed along? How do you now rate the stock? Is this a one time incident that will be overcome or does this significantly change your view?
Read Answer Asked on March 12, 2021
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