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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: Upon reading and re-reading the announcement by CSU of the “warrant dividend”, I am still confused and have several questions. I like to understand what I am buying and/or being given, and I don’t fully understand that in this case.

1. Do these warrant dividends cost me anything? I am fairly confident the answer is NO, but please confirm.
2. Is there anything that I need to do, or will the warrant dividends magically show up in my account one day?
3. Once I get the warrants how will they appear in my (RBC) investment account. They won’t be listed on the TSX or any other exchange until the “Company Redemption Right” is exercised so I am not sure what to expect to see.
4. If the warrant dividends are not trading, what value can you ascribe to them? Just use the nominal fair market value of C$0.0001?
5. When the dividend warrants can be traded, will they be traded like a regular stock?
6. When I sell a dividend warrant in a non-registered account, are the proceeds from the sale considered a dividend, interest, or a capital gain? I guess since it is a type of dividend, I speculate it would be treated as dividend income.
7. Is this something that is good, bad, or indifferent for a CSU shareholder?
8. Is it possible to give an example of how this would work from the point of view of a CSU shareholder and the debenture holder. Assume today’s price of CSU and CSU.DB
9. Based on your experience with this type of situation if I could sell my warrants today, what price range would you speculate they are worth?
10. Have you seen this done with other companies? If yes, which ones, and how successful was it for the warrant dividend holder.

A lot of questions, but take as long as you need to answer them.

Thanks,
Paul
Read Answer Asked by Paul on August 17, 2023
Q: I always kick myself when I come to realize a missed opportunity and tell myself that next time, i'll recognize the trend and take advantage of it.

This is me asking that question now.

What 5 US and 5 CDN positions, in your opinion are very much out of favour right now but have quality fundamentals with an excellent chance for share appreciation over the next 3 years?
Read Answer Asked by Robert on August 15, 2023
Q: Hi,

What do you think of this assessment and it's impact on the stock long term?


Tim Shufelt's opinion:"management’s assessment that insurance premium increases must perforce catch up with costs, allowing carriers to fund labour rate increases over the long term, and even though labour rates are not directly tied to written premiums over the short term, political action to curb the magnitude of premium hikes represents a growing risk in our view.”
Quoted from TD Waterhouse citing the GLOBE AND MAIL

Thanks
Read Answer Asked by Jean on August 15, 2023
Q: SJ: Organic growth in infrastructure related biz's seems to have slowed from 27% to 10% in Q2 which was not as robust as Q1. Inventory and receivables seriously gobbled up cash flow, down substantially in Q2 and negative in half. Hence shares were down 4% yesterday (after indicating up).
What do you make of this?
Read Answer Asked by Keith on August 11, 2023
Q: According to the July 18 news release from CSU:

"The Company’s quarterly results will be disseminated via press release and made available on the Company’s website ( www.csisoftware.com ) and SEDAR, after markets close on Friday, August 11, 2023."

Is it normal for companies to release their results after market close ON A FRIDAY?

Politicians want to release bad news at the end of the day on a Friday, especially before a long weekend. So I am wondering if a company would follow suit by releasing bad news at the end of the week after the market closes.

I am not expecting bad news, but I can't recall a company like CSU releasing their results after the markets are closed on a Friday.

Your comments?
Read Answer Asked by Paul on August 11, 2023
Q: Hi Team,
Can you comment on GSY earnings and the company in general? To me they appear to be record with great growth. Their model seems to be almost flawless with almost a limitless runway ahead in Canada with very little competition in their market. They now appear to also be benefiting from the new interest rate law as smaller competition is getting wiped out and they gain market share. I look at their market cap of only 2B...then I look at the revenue coming in. The valuation don't make sense to me. The company seems so cheaply valued by the market in my opinion. They keep executing, the loan book is now climbing at a exponential rate over the last couple years. It seems more and more people are needing their services. Do you think eventually they will take the company private? Or possible some private equity firm comes in and buys them out and keeps the dividend for themselves? With the numbers they are now putting out it appears like the company could buy itself out in only a few years. Am I correct in all this bullish view or what am I missing here? Appreciate the feedback!

Shane.
Read Answer Asked by Shane on August 10, 2023
Q: Market seemed to like the great Q2 results for Stella Jones. The press release mentioned the 2023-2025 financial objects from the inaugural Investor Day in May and I noticed the plan included a >$500M cumulative return to shareholders. The current $0.92 dividend payout is roughly $54M/yr which is well short of the goal objective. Any insight into dividend raises or special dividends.
Read Answer Asked by David on August 10, 2023
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