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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: The company seems to be overpriced as they are still losing cash. They have many competitors in all their sectors. Also, IMAX just closed a huge deal with China's biggest cinema operator committing to 150 IMAX screens, which reduces available space for potential D-BOX screens. As mass market adoption of virtual reality isn't yet a sure thing, would it be safe to sell this stock and rebuy it when on a big pull back? Thanks!
Read Answer Asked by Sam on August 03, 2016
Q: A question that has preplexed me for a long time is how should we, as investors, interpret a recommendation to "hold"? This term is used by virtually everyone in the investing community. And I am not referring here specifically to the target price data recently posted.

It seems to me that everyone should only want to always be owning stocks that are either doing well or they feel have the potential to do well - i.e. a "buy" (at least in their own mind) A "hold" signal to me suggests that the stock is in neutral and the analyst has little conviction as to whether it is a buy or sell. Therefore, shouldn't I only want to own stocks that are just "buys"? Whenever I look at my holdings, I am always asking myself if this is the best stock I can own for the long term because I am interested in overall results 5 years from now keeping sector allocation in mind). I have hung on to AVO, for example, because I still feel that the potential returns are better than anything else I can find in the sector. But I sold BTE because I didn't see a future there. Trading costs shouldn't be part of the answer as it only costs me $5 for each trade.

Appreciate yor insight.

Paul F.
Read Answer Asked by Paul on August 03, 2016
Q: I have a large portfolio of 1.3 Mil in value. They are accross all sectors. I will be adding another 200k shortly. I have no precious metals in my portfolio as I was not comfortable with the volatility. What would you suggest for percentage amount of precious metals and what companies, ETF's
would you suggest. Is holding physical gold less volatile that companies?
If so, is there an ETF that holds physical gold.
Read Answer Asked by Ric on August 03, 2016
Q: I am sure by now 5i must roll its collective eyes at the sight of another CXR question.
I don't own the stock but find it fascinating. Some analysts predict 2017 earnings to be $4-5 per share or even higher. Globeinvestor has their debt to equity at about 3x. My questions are these:
1. what is the major risk that the anticipated earnings don't materialize? gov't intervention? or is there fear that like Valiant there may be some misrepresentation on the books?

2. if debt to capital is 3x, that would mean that there is approx. $60 of debt per share, given a $20 share price. correct?

3. if they are paying an average of 5% interest on their debt, wouldn't interest alone eat most of their earnings? i.e. $3 per share would go just to interest. seems like it would take a very long time to get out of debt.

4. seems like it will be almost impossible for this company to grow by acquisition for a long time, given the environment. almost like a game of musical chairs where the music has stopped for a final time and there is no reason now to own the stock other than value. true?

Thanks for your patience with us as we try to figure this market out.

Cheers
John

Read Answer Asked by john on August 03, 2016
Q: http://investors.cvshealth.com/~/media/Files/C/CVS-IR-v3/documents/02-aug-2016/2017-standard-formulary-list-of-removals-and-updates.pdf

This may be another part of the reason for the sell-off today. Nilandron appears to have been added to the list of drugs to be removed at CVS for 2017 due to hyperinflation. I'm not sure of the implications as far as the percent of Nilandron historically sold through CVS. I would assume they'd re-negotiate pricing and take a bit of a hit?
Read Answer Asked by Mark on August 03, 2016
Q: Thanks for the bonus report. It is very helpful.

Can you please advise which sector each stock belong too.

Do you have any site where I can find sector information.

Are you planning to create sector information.

SANDVINE CORP
Evertz Technologies Ltd
Savaria Corp
EnerCare Inc
Intertain Group
TRICON CAPITAL GROUP INC
ALTAGAS
Shawcor Ltd
CHARTWELL RETIREMENT RESIDENCES
Sienna Senior Living Inc
Visa


Thanks for the great service
Read Answer Asked by Hector on August 03, 2016
Q: Peter & Team, as to the question from Dennis today, the company needs to begin reporting organic growth in Covis and AMCO, preferably be summarized product category. We cannot wait until they cycle up against these acquisitions by end of year to see comparables; we need to know if things are better or worse from when they bought these products. And we need to know it August 12th when they report the quarter.

Reporting against target EBITDA of $610 to $640 million and Net Debt/EBITDA of 5.5x is not cutting it (obviously).

If management won't disclose product growth prior to acquisition date or if there is no constant currency growth, would that not be 5i's cue to cut and run?

Thank you.

Read Answer Asked by Keith on August 03, 2016
Q: Seeing all of the questions about the big drop today and having purchased at higher levels i agree that it's a really frustrating stock. However, i read today that Taylor Asset Management (David Taylor of Dynamic fund fame) and Davis Rea (John O'Connell) actually added to their positions at the end of Q2. They seem to be looking at the fundamentals without emotion and see the value in the company
Read Answer Asked by Richard on August 03, 2016
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