Investment Q&A

Q: I currently own 1250 shares of AYA. I'm down approx 30% from my purchase price.

I feel with what is going on with AYA and all of the recent announcements there is an upside bias to the stock.

If I'm correct and the bias is positive I would like to employ an option strategy on this to try and make some money back on my paper loss.

What option strategy would you employ in this type of situation without perhaps selling a call and cutting off your upside potential?

Thanks

Sheldon

Q: For those who don't read the forums, here is some interesting information on New York gambling legislation.
http://www.onlinepokerreport.com/19482/new-york-online-poker-bill-passes-vote/

Do you think this will have an effect on the recent buyout offer price? Or is it too early in the process of passing the legislation? 9-0 vote appears promising! TIA

Q: How would this buy out offer work? Do they need over 51%?

Q: as you know stella jones has gotten crushed lately, now it seems like they are buying 2 different companies, they do not say whether they will immediately add to earnings but i assume they will, they also say they might do an equity issue, are you still comfortable with this stock in your equity portfolio, would you buy more and what do you think of the 2 aquisitions. dave

Q: I asked a question a few days ago but it must have been lost since it was not answered so I will re-ask. By reading responses to other questions I get the sense that Canaccord Genuity continues to be a good undervalued company; however, nothing may happen with my investment for several more years. The positives are price to book, good cash position, and a sustainable dividend if the company so wishes. The major negative could be several years with little or no growth due to the state of the Canadian Resource industry. If my statements are correct, should I sell my shares of CF and buy something else with greater growth potential over the medium to long term. If so do you have a recommendation understanding that I am overweight in resources and banks. Alternatively, with CF's low current price and good dividend should I buy more. Also do you continue to view CF as a B-. In my RRSP, CF only constitutes about 3%. Thank you very much.

Q: Hello,

Could I ask for clarification of this response to an earlier reply to Craig. Specifically, in what sense have you been wrong?
5i Research Answer:
We have been wrong on BNS, but we would keep it now, on valuation and with its international exposure offsetting a weak Canadian economy.

Q: Stock has really languished for a while. I would have thought that with concerns of cord cutting a content provider like this that could get their product out over any media and platform would be in demand. Is this simply a case of investors being fixated on oil and other things? I know you tend to like to invest on momentum but this company seems to be doing movign forward, signing deals, they have done it before and they are in the right industry. OK to average down on this one?

Thanks for your insight.

Paul F.

Q: Hi 5i - For investors that hold Amaya with an ACB in the mid 20s, what do you suggest? Just hold tight and hope a deal doesn't go through? I've heard that analysts were projecting mid 30s over the next 12 months and I was hoping to hold this stock long term (a bit frustrating). Thanks, Neil

Q: I could understand how a failed privatization would be a risk to Amaya's SP sending it back to under 15 where it was last Friday when the last 5 minutes of trading saw a huge lift on tremendous volume. What to read into this? Word was out and over the weekend Mr. Baazov figured it's happening again, like it did with Poker Stars, loose lips are blabbing and we'd better get the potential offer out there before the regulator catches wind (again). So we'll go with a semi-offer that could have used another 2 weeks to put in place and even if it doesn't fly a 20% temporary bump is nice for a 10%+ shareowner. Even if the longer term is rosy aren't there too many cockroaches appearing now and not being swatted?

Q: based on all the information i can gather the chances of an offer going thru at 21.00 are almost zero, it would have to be higher, furthermore another gaming company has a high probability of making an offer.
so at 18.00 overweighting amaya seems like a great strategy, yes there is the insider probe currency risk earnings risk, but these i think were already baked into the stock.downside is amaya goes back to 15-16.
in this kind of market taking advantage of opportunties like this if it works being the key word, seems like not a bad risk/ reward. please comment. dave

Q: What would you expect the shorts to do now.

Q: Hello Peter,
What would be the downside of going overweight on this stock at today's price? As I argue it, the probability of realising value of $21 or higher would be very high, even if the deal to take it private at that price or higher does not happen. What risks do you see at this price?
Regards

Q: Can you comment on the valuation of Sylogist? EV/EBITDA, P/E and P/S and how does it look relative to peers when you take out the cash? I'm wanting a small tech stock with growth potential but I don't want to pay a huge premium in this kind of market. Thank you.

Q: Low yielding companies such as Ccl, Csu, Sj that outperformed the Tse in 2015 are down over 10% so far in 2016.
High yielding companies ie Ala, PPl,Trp that underperformed last year are up over 5-7% ;
Do you expect this trend to continue?

Q: Any possible reason for price drop on Jan 28&29 when markets and most stocks were sharply higher? Two large crosses on Jan 29:
$198.25 10,000 GMP Securities L.P. GMP Securities L.P. 14:02
$197.50 13,700 Macquarie Capital Markets Canada Ltd. Macquarie Capital Markets Canada Ltd. 16:00. I have added to my position. Thanks

Q: Large cross of 320,100 shares by Acumen on Friday January 29 at $8.50 on Chi-X Canada exchange. Any significance, specially in light of strong insider buying/co.buy back lately ? Thanks

Q: PLease advise when SJ is reporting.Expected EPS of .45 & Rev.$362.05m--are these correct.Appreciate your usual great services & views.

Q: Hello Peter,
I am down about 30% with AutoCanada. The stock used to move higher when the price of oil ticked higher, but lately, it continues in a downward spiral. Is it better to sell it and move into another stock that has better potential or hold it for longer term. Alternatively, do you think it is better to sell half and move those monies into a stock with greater potential. Can you provide your comments on longer term aspect or on selling full or partial and which stock would be better replacement? Thanks, and I would appreciate it.

Q: Another question on CCL Industries. Appreciate your patience.

The Globe and Mail - Friday, January 29, 2016, 19:38:22

"CCL Industries Inc. is close to oversold levels in terms of RSI with a reading of 36.5, and the stock price remains well above its 200-day moving average. RSI has worked well in uncovering profitable buying opportunities in the stock, most notably when a buy signal in October of 2014 was followed by a 130-per-cent rally (not a typo) to Jan. 5 of this year. More recently, CCL industries stock fell close to oversold levels in August and October 2015 and quickly recovered.

Past performance, as always, is no guarantee of future returns. CCL benefited tremendously from the decline in the loonie – 83 per cent of its revenue is generated in the U.S. and Europe – and the Canadian currency has been showing more signs of stability lately. Investors must complete fundamental research before making any portfolio transactions."

Would appreciate your comments with respect to stock's technicals. Last tear in August and Oct/2015, I clearly remember, price rebound from oversold levels was spectacular. To me, current conditions appear to be very similar. Is the recent stability of CAD$ impacting investor sentiment, in your view or is it the valuation? To my knowledge, CCL has made several strategic acquisitions in past few months and it's growth prospects have only improved. Thanks

Q: Good Morning Peter, Ryan, and Team,
If this question has already been answered then please ignore it. I just wanted to get your take on the proposed management buyout of AYA at $21 CDN. I would be surprised if a deal got done at this price but I would appreciate your sage opinion of this breaking development. Thank you, DL