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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: Down 80% on PHM and 20% with AYA. Thinking of selling these turkeys and buying SIS. SIS is currently overbought, but seems to have generally good fundamentals. I bought GUD almost 2 years ago at its all time high and just broke even on that purchase. I am concerned about the current valuation of SIS and if I am giving up too soon on AYA. My new rule to avoid this mess in the future is to sell half when down 5% and sell the balance when down 10%. Thankyou
Read Answer Asked by Richard on May 09, 2016
Q: 5i Research Company Updates of April 4, 2016:
Well, we will get the bad news out first. As most Members know, the CEO of Amaya Inc. (AYA, Rated B+) has been charged with insider trading and has stepped aside from his duties. The issue has been well discussed in our Q&A section. We still consider the stock 'buyable'. Stepping aside was the right thing to do, but we are taking AYA out of our Model Balanced Equity Portfolio. There is still potential, but we think we can do better for the portfolio. We certainly see it as a 'high maintenance' name, and portfolio stocks we think need to be less volatile than AYA. Plus, if there is indeed a $21 bid mounted by the ex-CEO, the upside from current prices is limited.

Notwithstanding the ex-CEO is presumed innocent, taking AYA out of the Model Balanced Equity Portfolio is meaningful.
Would you now advise staying clear from Amaya for the time being, even with a rating B+ ?

In comparison, would you view Cineplex (CGX), recently maintained at A-, as a clearly better choice ?
Read Answer Asked by Serge on April 11, 2016
Q: Hello 5i team,
I’m concerned on Amaya’s future after reading this article in La Presse+ on April 2nd.
According to the article Michael Shatilla a Westmount broker and Jacques Lemelin a day-trader are part of a group that wish to obtain authorisation for a collective law suit against Amaya and its directors. They have deposited in Quebec’s Superior Court in order to get compensation for investors who lost after trading between March 31st 2014 and March 22nd 2016. They claim that privilege information was shared in order to boost the price of AYA in order to buy Poker Stars. Other distinctive law suits are in the works in the United States as AYA not only trades on the TSX but also the Nasdaq.
The fact that David Baazov has stepped down was appreciated by the markets. How much damage can this law suit do to AYA and is this going to keep the price down making it easier for the company to go private or is it too early to comment?

http://affaires.lapresse.ca/bourse/201604/01/01-4966833-recours-collectif-demande-contre-amaya.php
Ronald
Read Answer Asked by Ronald on April 04, 2016
Q: I bought AYA at ~ $6 and sold my last shares @ $32 after reading the 3 page article in the Globe & Mail about their CEO David Baazov. So thank you Peter and company for having this stock in your balanced portfolio. But the game is over, for me it ended with the Globe article. So please do the right thing and replace this dog with another winner. Time for spring cleaning.

Steve

Read Answer Asked by Steve on March 29, 2016
Q: The charges are against Baazov & 5 others.Stock prices were up sharply prior to announcement of acquisition----How come?? Do you think that Baazov or Baazov & potential partners will make a bid of $21 now that its price is $15.45???.If found guilty,big fine &/or prison term..There is another suit too.Many problems.Many fund manager & investors are avoiding the stock.This is my humble opinion.
Read Answer Asked by Peter on March 28, 2016
Q: Hi Peter, Ryan and Team - Although we can't ignore all the controversy surrounding Amaya since it has a major effect on the stock, based on just the fundamentals, balance sheet, earnings and potential earnings would this be a good company to buy now. Also what is the debt level - is it a concern - and could you provide the level of insider ownership as well. I have found your your advice to be invaluable ever since joining 5i Research - what a great service! Thank you.
Read Answer Asked by Rob on March 28, 2016
Q: It seems to me the charges against Amaya's Baazov are more akin to tipping and stock manipulation than insider trading, probably even more difficult to prove. However there's a cease trading order on these insiders so wouldn't that affect Baazov's ability to continue with his $21 bid, even if he wanted to? Also how many months might this case drag on before people get their day in court and isn't it likely the stock will mostly mark time till things are resolved?

I wouldn't be in this stock except for 5i but my average cost is <$8 having been in since 2013 and I have taken profits 4 times up to $35 so even though I didn't act on the Feb.29 blog post (actually sold some more @$19) I did act on the CUS reco and am currently +5%, so thanks for that. It's my opinion that we are all personally responsible for our own actions, not someone else! J.
Read Answer Asked by Jeff on March 24, 2016
Q: i think you guys have a lot of egg on your face concerning amaya,on feb. 29 you published a report, 2 stocks that the market might have wrong and amaya was one of them.
a bigger question is who in the right mind would finance bazov to buy the company while these charges are pending- the answer is no one.
the only hope is for him to step aside or a third party bids for the company.
another question, what about your cockroach theory which i believe in, there is never one cockroach, amaya is finished for now.
comments dave
Read Answer Asked by david on March 23, 2016
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