Investment Q&A

Q: Would CSU's spin out of Topicus be a potential addition to any of your model portfolios?

Q: Good morning,

I have CSU journaled over to a US cash account. With the spin out coming, what are the tax implications of leaving it there? Or should I journal them back to my Canadian cash account?

Q: Hi 5i,

So CSU spins out Topicus and the stock trades on the venture. Globe and mail states that Topicus’ equity value is $1.86B ($1.2 billion euros). Assuming that this is also the market cap, this would Topicus the largest stock on the venture. Some institutional money may have to sell due to restrictions (e.g. like not being able to hold companies that trade on the venture).

This puts downward pressure on the stock. It trades at a discount.

It then starts getting traded on the TSX and large institutional money flow back in. In addition, being a stand alone company gives it a higher multiple.

What do you think?

Q: Hi 5i,
Will the CSU spin out of Topicus be a taxable event? I hold CSU in a taxable account with an as yet uncrystallized capital gain. I would prefer it if there were a way for me not to have to take the entire capital gain in the current tax year. Thanks.

Q: I have essentially equal holdings in these mega caps and other US and Canadian techs listed. For a new additional tech investment, any thoughts on the best addition? Would you recommend more to an index?
I'm trying not too add too many new names.

Thanks in advance.

Thanks,

Q: How much do you anticipate the share price of CSU dropping on the Topicus spinout?

Q: When will the Topicus be shares be listed on the venture and how long would you have to hold CSU in order to be eligible for the 1.86 Topicus shares for 1 CSU share?

Q: hello 5i Research team,
Probably a very easy question: who are the “Jorday Group” and Ussel in the CSU spinoff? How would you rate them as significant shareholders? Do current Topicus.com B.V. CEO Daan Dijkhuizen who will be appointed CEO, and current TSS head Robin van Poelje future Chair have good pedigree?
Thank you for your collaboration, Eric

Q: I currently own Csu in my tfsa . Topicusseems to have a better growth rate and higher profit margins then Csu.
I am considering switching half of my shares of Csu into Topicus when those shares
are available.
Your opinion please

Q: I recently sold ET and wondered if buying SYZ would be a good replacement for a RRSP or is CSU a better replacement. I currently own KXS ,DSG,CGI.A,LSPD
Thanks

Q: this is not a question, but a comment to the question from Lai Kuen who is holding Constellation in a USD account. Constellation pay their dividend in USD, so if you keep the shares in a USD account you will be credited with USD $ and avoid exchange fees. You still be eligible for the dividend tax credit.

Q: For the release concerning the spin out, it mentions the Venture Exchange.
Does that mean that this now company will be on the Vancouver and not on the Toronto
exchange?

Q: By mistake I used US dollar to buy CSU, it now shown in my US investment account. Do I need to do anything with CSU , ( sell then buy in Canadian account ? ) regarding to the TOPICUS spin out. Thanks for your excellent service.

Q: Can you comment on the prospectus? Thanks

Q: I have held CSU for a few years and wonder if it's time to make a switch to REAL?

Q: I have held a position in OTEX for some time, and have a moderate gain, but I was wondering if it would be prudent to swap out my OTEX for CSU. I have losses against which I can neutralize my gain, so tax implications are not a prominent factor. Both are good companies, with the reputation of CSU being quite extraordinary. I have decent exposure to technology, and I don't feel that simply adding to it by purchasing CSU through selling off an investment in another category would be as prudent as keeping within my current allocations. I would appreciate any thoughts you could share with me. Thanks so much!

Q: In your response to Leonard today regarding the potential CSU spinout of Topicus you mentioned that CSU shares will likely drop to reflect the value of the spin out. Does that imply that shareholders of CSU would receive shares of Topicua? Thank you.

Q: Two part question about CSU: some time ago there was an announcement of a transaction where a company acquired by CSU would be "spun out" to CSU shareholders. Can you provide details of what is to happen? when is it to happen? do you expect CSU's share price to decrease as a result? What tax consequence will there be to CSU shareholders?
Secondly, I recently read the following:
"Our Strong Sell is based on our conviction that it
is difficult to create shareholder value by
continuing to add shrinking legacy software
businesses to 100’s of other shrinking legacy
software businesses. With organic topline
contraction and fading operating leverage, we
see CSU’s “never-ending roll-up” finally hitting
hard limits. In our view, CSU is too reliant on the
assumption of customer stickiness for legacy
apps with expensive support contracts in
dozens of niche/vertical markets. We see these
apps increasingly dislodged by less expensive,
more inherently agile, cloud alternatives. A
Covid-19-driven economic downturn would
likely intensify this competition, as it is our
experience that, rather than preserving the
status quo, tough times drive customers to
overcome inertia and accelerate paradigm
shifts in enterprise IT."
What is your assessment of this?
Thank you for your excellent service.

Q: Good morning 5i,

Looking to add two names to my portfolio, with the only criteria being a combination of balance and growth, and with a long-term horizon. Currently thinking of GSY and REAL/LSPD, are you good with these at today’s levels? Listed some others I’m interested in too. Any other of your favourites you’d consider (already own KXS, WELL). Thanks.

Q: Just for fun and just your opinion, but where do you see CSU 10 years from now?