Q: Morning 5i,
Here's my burning question which I'll frame as a hypothetical;
Say a fella had 2500 shares of CTS in a TFSA with a BV of ~ $20K and a current MV of ~ $6.6K (hypothetically speaking ...). Taking into account the prospects for CTS over the next 3 years (the fella can afford to wait it out but doesn't like seeing all the red every time he looks at his TFSA account) would it be advisable to liquidate the CTS and invest the ~6.6K elsewhere and, if so and importantly, what 'elsewhere' would you invest in to get a return on the money (cap gain and/or dividends) that will outpace what it's likely to do if left in CTS, all without unduly risking compounding the problem?
You know, hypothetically speaking ...
Thanks 5i.
Peter
Here's my burning question which I'll frame as a hypothetical;
Say a fella had 2500 shares of CTS in a TFSA with a BV of ~ $20K and a current MV of ~ $6.6K (hypothetically speaking ...). Taking into account the prospects for CTS over the next 3 years (the fella can afford to wait it out but doesn't like seeing all the red every time he looks at his TFSA account) would it be advisable to liquidate the CTS and invest the ~6.6K elsewhere and, if so and importantly, what 'elsewhere' would you invest in to get a return on the money (cap gain and/or dividends) that will outpace what it's likely to do if left in CTS, all without unduly risking compounding the problem?
You know, hypothetically speaking ...
Thanks 5i.
Peter
5i Research Answer:
It is a tough call; CTS has issues, but is cheap and as a small company could bounce very well if it ever sees any good news. But the balance sheet is leveraged and it certainly has been a disappointment. We would rate it a HOLD, officially. The valuation is low enough to offset some of the issues. That being said, we would be OK with a switch to something like ATS, TFII or BYD for more 'reliable' growth. These are also all much larger and likely safer overall.