skip to content
  1. Home
  2. >
  3. Investment Q&A
You can view 3 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I hold some 5 year rate reset preferred shares series A from Element Fleet Management (EFN.PR.A) which will reset to 6.933% on Dec 31, 2018. They also carry a conversion privilege to convert to series B floating rate preferreds (3 month T-Bill + 4.71%) which will be 6.444% for the first 3 month period in 2019. Given your outlook for interest rates going forward, would you advise converting? In addition I cannot find the ticker symbol to get a quote for the series B preferreds. Do you know the ticker symbol?
Read Answer Asked by Steven on December 10, 2018
Q: Hello,

I currently own SRU.UN (SmartCentres REIT). I like the dividend but I am interested in capital growth as well.

Do you recommend keeping SRU.UN or to switch to CHR (Chorus Aviation) or EFN (Element Fleet Management) ?

Or, do you have a better recommendation for a stock which has has a good income, dividend growth and capital growth?

I have over a 5 year time horizon.

Thank you as always for the financial insights.
Read Answer Asked by Marc on August 02, 2018
Q: Untangling the relationship between ECN and EFN is above my pay grade, but hopefully not above yours. Are there any lingering connections which would keep these entities tied together, where fundamental problems in EFN could leech into ECN? Or are they now completely and absolutely separate? Thanks again!
Read Answer Asked by Alex on March 19, 2018
Q: hi folks:

not a question; just a PSA for the membership

executive summary: mgmt is likely the most important issue when buying shares in a business

in the case of EFN (as with newcourt) it sure seems like mr Hudson learned nothing

a sad loss of capital

(this from august 2015 )
Asked by Robert on August 27, 2015
Q: hi folks
further to an earlier email on element with respect to mgmt
I remember when newcourt and steve hudson had their heyday in financing in the 1990's and early 2000's

from my recollection there was a lot of 'creative accounting' (a term updated recently to "financial engineering")

question: in light of this 2.2BB issue today (which increases the company capital structure by almost 40%) what makes anyone believe that this mgmt is any more competent than when they near bankrupted newcourt?

one thing of interest being they didn't borrow the whole 2.2bb

comments?

thanks for your insight

robert

5i Research Answer:
Element learned some very good lessons at Newcourt, and has not repeated them in companies since. It was not perfect, but if management takes away valuable lessons we can still support them (Tourmaline management had some issues at Berkley Petroleum in the 1990s, and learned lessons there also). While the ending was not what some expected, keep in mind that Newcourt was still successfully sold (for more than $2.4 billion). We have quoted a Globe article below: We think the key is the short term borrowing switch. This issue does underscore that shift.

Mr. Hudson says he has learned his lessons from Newcourt. Don't expand too fast with acquisitions. Use the most conservative accounting. And perhaps most crucially, don't borrow short-term and lend long-term.

Newcourt funded itself in the commercial paper market, borrowing for a few days or weeks at a time, while lending money for months or years. As a result, the company constantly had to roll over its financing. When markets shut down because of a financial crisis in Russia and Asia, Newcourt was on thin ice.



Read Answer Asked by Robert on March 18, 2018
Looking for more? Sign up for a FREE 14 day trial! No credit card required

We invite you to sign up for a 14 day free trial of 5i Research!
Experience all the benefits and tools we have to offer; stock research, model portfolios, Q&A with our experts, and so much more. Join a community of like-minded investors today!