Investment Q&A

Q: In a TD report on XBC q3 the following comment is made, "Notably, our EBITDA estimate did not include the $5.3 million in severance incurred during the quarter as it was not contemplated in our forecast."

$5.3 million in severence for a company the size of XBC seems high to me. This occurred following the new COO hire.

Wondering if you could shed some light on this. Was there a cleaning of the house following the financial troubles announced earlier this year?

Q: Anything to add after the call?

Q: Hi 5I

I want to sell XBC and replace with TCS. I understand the issue of them being entirely different business models and markets but they both are high-potential tech enterprises. And I've lost patience and trust with XBC. Your thoughts.

Carl

Q: Thoughts on XBC earnings and what they mean going forward.

Q: Hi 5i - can you provide your thought on the recent acquisition and advice on whether I should add to a 1% position at these levels (prior to the quarterly results)?

Thanks, Neil

Q: Any news reason on the recent upswing??

Q: Good day ,
Is it time to start adding here, appears momentum is turning positive ?
Thx
Mark

Q: loss aversion-when the pain of a loss is greater than the satisfaction from a win.
many of your members suffer from it and its a retail investors greatest sin
using xbc and mrs as examples you seem to be encouraging your readers. to hold on even though you say they are on a short lease-WHY!
take the loss use it at tax time, so many great companies to buy-aritzia, gsy, lspd, nvei -i could go on and. on.
and why do you keep insisting you have to give a company 3-5 years-where did that come from.?

dave

Q: In response to Justin’s question about the short leash for XBC I wonder if you could comment on my rationale for holding onto this stock despite also being down about 50%. I agree with 5i’s principle of the longview of 3-5 years for growth stocks if no material change presents itself. As for XBC I remain positive for the following reasons: it seems much of the difficulty is COVID related, the board has taken concrete positive steps to rectify weakness, the business model has diversified significantly, the sector is just getting started and there should be years of tailwinds. In following your advice to invest for the long haul in growth, not get emotional about the volatility that presents itself in this space and the feeling that markets in Canada tend to overreact to news much more so than in the US, could you make the case for those like me that would like reassurance that XBC remains a viable position to hold based on valuation and potential.

Q: In September you considered it a hold but are not adding to your position. Based on the last growth portfolio update, it has a weighting of ~1.2%. You have also indicated that there will likely be some tax loss selling.

I am down ~45% in my TFSA on this one and makes up 1.1% of all holdings.

What discussions are going on with 5i in regards to your position with the growth portfolio. Is patience wearing thin? Are you looking to remove it because its stuck in "show me" mode and management fails to improve margins? I am trying to decide whether to cut my losses and move onto something with better growth, execution, and conviction.

Q: When do these companies next report and what are expectations? Can you list which companies you would dispose of first, second ... etc

Q: Looking for buys in the upcoming tax loss selling season. Please rank the attached list. Thank you. Greg

Q: your opinion about MCR please.
Why is this company lagging the oil sector?you would think it would move with oil price going up.
Is there a chance it would be a take-over candidate?
are there other companies that you prefer ,like Questor or XBC?

Q: Would GRN be a good replacement for XBC? Which stocks would you recommend instead?

Thanks for your service?

Q: Hi 5i,
I have the following in a non-registered (and high risk tolerance) account:
LSPD (+55%)
GAN (-21%)
XBC (-65%)
QUIS (+21%)
AMY (+28%)
PLTR (-15%)
NANO (-28%)
OPS (+37%)
PLUG (-62%)

1. Is there any names on this list that you would consider selling at a loss and re-deploying elsewhere?

2. I'd like to buy LSPD in my separate registered account considering the sharp drop over the past couple weeks. Is there any limitations on owning the same stock in both registered and non-registered accounts? I am comfortable in my overall position so that would not be a concern.

Please deduct credits as you see fit.

(There is a chance I've submitted this question twice; if so, please answer this one. My browser crashed during my first submission and I'm not sure if the first one went through.)

Thanks for your insight,
Kyle

Q: Hi 5i
Been looking at XBC to add as it consolidates.

During my review I found something unsettling and since I can not get the sound to work on the earnings webcast, I can not confirm whether someone asked about this or not.

It has to do with the margin squeezing contracts that are restraining profitability. In the most recent commentary the CEO includes the words "long-term" when referring to the contracts and indicates margins to recover in subsequent quarters.
He never referred to the contract as long-term in previous communications.

It was my belief the negative contributing contracts would roll off in a couple quarters - not many. The statement leads me to believe there will be a longer effect than just a couple quarters.

Do you have a sense of run-off period?
Do you know if anyone asked about the run-off period length?
Was "subsequent quarters" more clearly defined in the Q&A?
Given the new size and make-up of the company, is the magnitude of negative contracts worth concern?
5i has indicated investors should not average down on this name at this time. What is it that will change your view on this position?

Thanks
Dave

From CEO Current Market Outlook (Q2 2021 Earnings)
While consolidated gross margins continue to be impacted by the previously announced loss making long-term, production-type RNG contracts, the company expects that this impact will be tapered down in subsequent quarters.

Q: Hi Peter and Staff

I realize the contract this week did not change to share price ....you suspected a lead caused it to go up, then came back down.........how significant do you think it is in the hold thesis?
Thanks for all you do
Dennis

Q: Can you please comment what's the reason for sale off today?

Xebec just signed another hydrogen contract with Flat Steel Manufacturer, isn't this a positive news?

Q: Good morning 5i team
Which public companies in Canada are leaders, or emerging leaders, in carbon capture and production of CO2?
Which of these (if any) would 5i recommend for consideration for investment, and why?
Thank you
Edward

Q: Would you have a short list of 5 companies that should be on a watchlist for when (if) a 10% downturn comes before Christmas ?
Thanks,
Peter