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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: This is an observation on Knight after your response to Cheryl's inquiry and your revised position stating you are getting edgy about this company.
One aspect of investing I have learned from my time with 5i is to have patience with a company and to not react to one quarter results.
Regarding Knight, we waited and waited and finally they did a solid acquisition which closed at the end of November 2019. 5i indicated it was a good deal for Knight.
They have not completed the deal as they are still pursuing the 48% from BTO shareholders. This is an unusual way to buy a company and it taking a long time.
However, after they pay everything, they will have no debt, lots and lots of cash and have repurchased over 12M Knight shares. They are presently doing a second NCIB with the intent of buying another 10,8M shares. So, they are buying 20% of the floating shares, enhancing shareholder value. Should they have started a dividend instead? I think that was too early and approve of their share repurchase. However, does that mean they don't see any future deals on the near term horizon? I do not know but they will still have a few hundred million...
They have now reported one quarter. The sales met one analyst's estimate but fell short with the other two. Not exactly a disaster considering it is a new company in new and faraway countries during a pandemic. The company says the virus is a non-factor but many in South America, and everywhere, are more reluctant than usual to seek medical treatment that is not absolutely necessary because we want to stay home and that has to hurt drug sales.
I think this company's share price will be double by this time next year and will be approaching $25 - $30 by the end of 2023. Considering the high valuations in the market today, this seems like a prudent investment. If they have not performed by December 2023, I will sell my large position and take the bath. However, I am not buying any soap today.
Do you have any update on whether they have purchased any shares on the second repurchase? And, they were late reporting the last quarter so when do they report again?
It is almost unthinkable to differ from your opinion on any stock because you are all so smart. We'll just have to see on this one but I think it's too early to expect so much after waiting so long...
Thank you.
Read Answer Asked by Steven on July 29, 2020
Q: Looking for a reasonable dividend (>2%) with some growth in a non-registered account. Was thinking of binning PPL and ZRE (down more than 20% on each), harvesting my tax losses, and replacing with PKI and SIS. Would you suggest holding the course, or swapping one or both out for PKI and/or SIS? (I would have considered swapping out for TRI and/or SLF, but am already at 19% financials.) Thank you.
Read Answer Asked by Maureen on July 29, 2020
Q: WHAT IS THE DIFFERENCE BETWEEN BOOK VALUE AND TANGIBLE BOOK VALUE
Read Answer Asked by John on July 29, 2020
Q: Hi 5i team,
Kodak caught my eye today. It was up 250% in the pre-market. I used to own it 100 years ago. Last I remember, it was on the verge of bankruptcy as no one was buying cameras anymore with all the smartphones offering that function. Now it wins a contract from the U.S. Government to manufacture drug ingredients to help offset supply chain issues with China. I don’t plan on buying Kodak but this seems like the craziest company pivot I have seen from manufacturing cameras to drug ingredients. A sign of the times, perhaps?
Dave
Read Answer Asked by Dave on July 28, 2020
Q: Next Thursday, 11 companies (which I hold) are reporting their earnings either before market opens or after market closes. This is a record for me. Curious, what procedures do you or other 5i team members use to deal with even more companies reporting their earnings on the same day in a timely manner? Thank you.
Read Answer Asked by Karen on July 28, 2020
Q: Question asked by Terry: "What was the price of Fnv and the price of gold at the end of 2011?" Canada Stock Channel will give compound earnings on $10,00.00 with and with out dividend back to 1995. Just enter the stock symbol and date range. https://www.canadastockchannel.com/compound-returns-calculator/
Read Answer Asked by Roy on July 28, 2020
Q: I am wondering what the most relevant gold price is. I see the December gold futures contract displayed on BNN as of yesterday, and which just touched 2k, but that contract seems a little far out (time wise). Shouldn't they be showing the September or October contract prices when the August contract 'rolls over'? Is the spot price the most relevant price, or the front month contract? When exactly is a futures contract considered 'rolled over'? What is a reliable source for the gold spot price?

Please deduct as many credits as necessary and help me clear up my confusion. Thank you.
Read Answer Asked by Marco on July 28, 2020
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