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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: I struggle with ATS and KXS whether to sell or continue to see drifting lower. I know you suggest selling if something fundamental has changed for the worse. People commonly thinking ATS is a growth name, but their backlog is shrinking, still a growth name? Fundamental changed? KXS's growth is declining as well....when it will resume their growth? If sell them, what to buy to replace? Can I have your thoughts? Thanks.
Read Answer Asked by Lin on March 22, 2024
Q: Bit confused over 5i responses given on WELL yesterday. 5i initially said results were good and it appeared from answer that there were no negatives. But stock was taking a big hit. Then new questions came in and you responded that there were some negatives (eg decrease in margins, net income and , cash flow). Obviously these are important as sellers stepped in and continue today so far. Usually 5i provide good insight but I think you guys dropped the ball on this one. The initial response should have hi-lited both the good and the bad. And whether the stock had a good run leading up to earnings shouldn't affect your response. Again, I stress usually you give full and fair insight and assessment but not this time.
Read Answer Asked on March 22, 2024
Q: Is this why the sell off today decrease in the annual numbers comparables?

Adjusted Net Income(1) was $52.4 million, or $0.22 per share in 2023, a decrease of 2% as compared to Adjusted Net Income(1) of $53.7 million, or $0.24 per share in 2022.
Adjusted Free Cashflow was $42.4 million for 2023, a decrease of 13%, as compared to Adjusted Free Cashflow of $48.9 million for 2022. The decrease was mainly due to higher tax and interest payments offsetting the increase in shareholder's EBITDA.
Net Income was $16.6 million or $0.00 per share(2) in 2023, a decrease of 11% as compared to Net Income of $18.7 million or $0.00 per share in 2022.
Read Answer Asked by fwb181 on March 22, 2024
Q: Hi there, any further insight into WELL after the conference call?

Are they being unduly punished for any particular reasons after good results, and if so, can you explain why the markets are pushing the stock down so hard?

I'm confused as to why this stock keeps being held down with such good growth over the past few years!

Any further help would be greatly appreciated.

Thanks!
Read Answer Asked by Hussein on March 22, 2024
Q: Here is another take on WELL:

Adjusted gross margin 43.7 % down from 51.3%

Adjusted net income $52.4 million down from
$ 53.7 million

Adjusted free cash flow $42.4 million down from $ 48.9 million.

I am in the camp of Warren Buffet and Charlie Munger who dismiss EBITDA. If you’re going to give a financial number before interest , for instance, you may as well exclude salaries ( or anything else for that matter ) as well.

I own WELL but will keep a closer eye on it. Please shot holes in my thoughts. Thanks. Derek



Read Answer Asked by Derek on March 22, 2024
Q: I sold 1/2 of my ATD because it got to over 20%. Do you think a good replacement with the recent weakness would be BYD or do you view the risk as significantly higher? Do you think the selling on BYD after its Q release is over done? What would be a good entry point? Is there another stock you would consider a better replacement for ATD?
Thank you.
John
Read Answer Asked by John on March 21, 2024
Q: Assume that you've come across LMN's annual report. You have no idea the name of the company and its attachment to CSU. You area also aware of past metrics, and other numbers - the short history that it has.

Question - based on seeing these numbers, what do you see as a reasonable P/C and P/S valuation (or any other better valuation metric) for this unknown company in an assumed economic slowdown....just roughly. Thanks.
Read Answer Asked by James on March 20, 2024
Q: Hi there, todays news that CTS was awarded 2024 Nvidia Networking Partner of the Year as well as the Canadian Partner of the Year confirms they are deeply involved with Nvidia.

Does this really mean much? I'm sure it definitely brings more awareness of CTS.

But do these types of recognition awards increase business/sales, etc? Especially considering Nvidia is talked about everywhere and all the time now.

Thanks!
Read Answer Asked by Hussein on March 20, 2024
Q: In your opinion, which five(5) Canadian companies are best positioned to increase their net value because of Ai? Thank you!
Read Answer Asked by Pat on March 19, 2024
Q: WELL has required a lot of patience. I know you still like it, but is there another smallish cap you would select over it? I own TSU, LMN, SIS, and SYZ.
Read Answer Asked by Alan on March 19, 2024
Q: Hi, Could you please share your thoughts on the recent performance of the stock. LMN stock made a high of $38, just before release of its quarter, but its price has been drifting lower since then, closing at $33 level, within a span of less than 10 days.

The results looked solid, but apparently, there seems to be some concern among investors related to an expense of $2,871 mln (FY 2023), related to the increase in fair value of the redeemable preferred/special shares and dividend payable. LMN also intends to issue new common shares on March 25, 2024 to satisfy
(1) mandatory conversion of the large block of preferred and special shares held by CSU/Others at a predetermined ratio
(2) payment of $87 mln of dividend on these shares and number of such common shares, to be based on average trading price of LMN for 60 days prior to March 25.

My understanding is that the loss related to “Increase in FMV of preferred shares” is only a “Book Loss” and will extinguish completely, with no effect on company profitability (Existing and Future) once the preferred shares are converted to LMN’s subordinate voting shares on March 25.

Thus, the only relevant factor here should be the impending issue of new common shares (How many and the final total o/s shares), which would result in increase of the share count, possibly impacting the Net Income and CFO per share and further elevating the PE ratio.

So, is the market concern justified or it’s more of a sentiment issue, which should resolve itself with more clarity over next few quarters?

Based on your assessment, do you believe that nothing has changed to its mini CSU profile? And if so, is it a good opportunity to take advantage of this uncertainty and to add LMN shares at current level ?

Thank You

Read Answer Asked by rajeev on March 18, 2024
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