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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: Have been dithering on having a greater tech exposure for my portfolio due to my ignorance of the space. Nonetheless, have narrowed down to two choices, Descartes or Taiwan Semiconductor. Given their low correlation (.25) would you favor, one, the other or both? (anticipated total exposure < 5%) Currently have a small, speculative position in PHO:CA (<2%) Other solid, possibly dividend paying suggestions are welcome. Thanks.
Read Answer Asked by David on April 13, 2020
Q: My Tech holdings are represented by csu; kxs; otex; shop; lspd. All held in TFSA. Have had good results with all except lspd which is a relatively new purchase and am willing to ride out my position in this company and wait for recovery.
You frequently mention DSG as a top pick in the tech sector and am considering selling otex and adding dsg. I do not want to increase my overall Tech position.
Your opinion?
Read Answer Asked by Bruce on April 09, 2020
Q: Hi, Our ACB for LSPD in non Regd account is $32. We have large Capital gains due to BYD conversion. Does it make sense to book capital loss by selling LSPD today and buying back after 30 days. Based on present market conditions and news around COVID-19, do you think it makes sense or there is risk of stock going back higher in 30 days time. Or, i
nstead, doing same exercise with BYD is a better approach. Thanks
Read Answer Asked by rajeev on April 07, 2020
Q: I starting purchasing LSPD last August and I have continued up until late last week. My average price is close to $32.

The question that I have to myself is: Do I double down or hold - I am not interested in selling. I had a full position 30 days ago but it has been reduced by more than 50% this past 30 days.

After rereading your answers, looking at LSPD website and news feeds. I gathered and summarized the information below.

Money in bank - lots - greater than $300 million - NO Debt!
15 years of cash at current spending rate.
Large institutions bought at $37.30.
IPO $16.00

Last quarter financial information.
Revenue was a slight beat at $32.8 million.
Met ebdita projections with a loss of $5.25 million.
Book valve is $2.35.
Growth was above 60% yoy to plus $32 million.
Recurring revenue was growing at 58%.

Institutional investors have 49% of the float, with Caisse owning 37%.
They have business in more than 100 countries.
There will be less restaurants in future, maybe 20% less.
The restaurants that are remaining will be financially stronger and have less competition. They will seek out SaaS that can reduce operating expenses while increasing revenues.
Lightspeed has good management.
It is a long term hold for me - 2 to 5 years - maybe forever.
Lightspeed has less than 0.1% of market, I like growth companies.
Lightspeed retailers grew over six times faster than industry average.
Products by Lightspeed: Retail, eCommerce, OnSite, Restaurant, Delivery and Loyalty. Also Lightspeed Payments. Rolled out #lightspeedlocal

They recently bought: Gastofix (Germany), Kounta (Asia Pacific), IKentoo (Swiss) and Chronogolf (Montreal),

A few competitors through a google search, of which I don’t know whom will survive due to many reason ( like lack of money): Shopkeep, Revels, Toast POS, Touch Bistro, Sapaad, Cake, Springboard, Square, Vend, Upserve, Lavu, Clover, AccuPOS, Harbourtouch, POSguys, Touchsuite, ) these are some of the top 20.

Strengths: the bank account; they don’t have to worry about paying operating expenses for many years due to its financial strength; significantly more room to grow; Quebec pension company support and Quebec government support; their source of revenue is across the world; good management; the good management will quickly use its financial strength for growth; growth into other areas that have weak or low market share systems.

Weaknesses: their competitors may have deeper pockets and will grow more quickly dwarfing LSPD and the other competitors; no sales people; how much of their current POS businesses will not be in business in 90 days; others?

That being stated I plan on doubling down in the next 4 weeks by buying when stock in under $13.

Am I missing anything?

Clayton
Read Answer Asked by Clayton on April 06, 2020
Q: The current volatility and fear in the market has lead me to believe there will be some companies that will unnecessarily be punished/caught in the crossfire and therefore offer a great risk/return
could you please list out companies in your mind that have decreased significantly unfairly and/or offer a compelling risk/return in the US or Canadian Markets
thank you
Read Answer Asked by cary on April 06, 2020
Q: Hi 5iR Team, I know that LSPD is a software development company, that has developed an ecommerce platform so clients can manage inventory, sales, customer needs, etc.. My question is: who exactly are their customers, in particular their largest customers? My concern is if restaurants form a significant part of their customer base then perhaps I should be avoiding LSPD, no matter how much money they are sitting on??
Thanks Team. Cheers, Chris
Read Answer Asked by Chris on April 03, 2020
Q: You mentioned in your report that clients are mostly retailers and restaurants. Is it mainly for very small businesses? If so, is it not much harder to scale since growth and $ per client is somewhat limited.

Is their product for online stores as well or only retail locations?

How do you like management? Since it has voting control I was hoping to see a bigger stake in the company.

I understand it s higher risk. Do you see the stock as a good/great pick for TFSA long term (5 years +)?

Thank you for your comments. I am just tying to add some tech exposure with stong growth to my portfolio.
Read Answer Asked by Pierre on April 03, 2020
Q: Hi group what the heck happened with BYD bottom fell out please give new target price to purchase along with explanation. Same with LSPD this is beyond belief. You tell us when to buy some stock but seldom tell us to sell BYD + LSPD a are examples of that. I suggest that you need to start giving out target prices (in a range at least). A lot of these so called blue chips are getting hammered was the low on the DOW + TSX 2 weeks ago or are we going to see more downside?. We need help to rebuild our losses so start to think about target. prices selling + buying . Thanks PS deduct credits as you see fit
Read Answer Asked by Terence on April 03, 2020
Q: Good morning, I hold these smaller cap companies in my TFSA for more aggressive growth, a strategy I believe you endorse.
In this new reality, I am thinking of a more conservative approach and selling the above and converting to FTS, RY, XRE, SLF.
If things recover well I will get a great pop on the big caps without the individual company risk associated with the smaller caps. If things go poorly with the recovery, my large cap mix should drop a lot less than the smaller caps.
Also, any of the above smaller caps that you do not like.

Thanks
Rob

Read Answer Asked by Robert on April 01, 2020
Q: I have the following securities in what I consider a balanced portfolio. The fixed income portion doesn’t show here because it consists of OAS. CCP. Plus two other pensions.
I’m thinking of sell part position in MMX ( small loss);and ARE to realize a capital loss while at the same time raising some cash for the next pullback. I like TFII . We need to keep the food chain moving. Trucking an important part . The other is cargo jet. Am I on the right track . Your opinion. Or would you look elsewhere given the current holdings.
Read Answer Asked by Roy on March 27, 2020
Q: Of these 9 equities + ETFS, which would you see as reasonable to hold on to if one believes there is a prospect of recovering from the current economic storm from the virus? Some have been held for a long time are still positive, most are down; TOU is the worst (85% drop) and is now very small. They are held in a registered account, so tax loss selling is not an issue. Thanks for your excellent service.
Read Answer Asked by Leonard on March 26, 2020
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