Investment Q&A

Q: Can I please have your thoughts on CUS. Long term hold? Thanks!

Q: AVO: a comment, not a question. I added some AVO yesterday after another ex-Sprott analyst, Peter Imhoff, stated that an analyst had informed him that the departure of the AVO CFO was indeed a health issue. Today's analysts' reaction has overall been very positive: see https://app.box.com/s/ktool1zhljj6zhewjw7t

Q: Hi, could you please provide your comments on Auto Canada results? Thanks

Q: Avigilion's growth rate has not slowed, the margins are even better and there has been a huge sell-off. I had a 5% weight in my portfolio which would be lower now at today's prices.
Is this the right time to buy some more and increase the portfolio weight with a lower average price? If you do not agree then would you suggest buy for a short term trade? With such a sharp drop, there has to be a bounce back about 10%? Or should i look to bail out when there is a bounce back? The average time frame that i try to invest for is 12 months.

Q: Hi Peter & 5i: This just a comment on the recent Avigilon (AVO) events. I owned it. Now I don’t. I don’t view the quarterly report as a definitive answer to everyone’s worries upon the news of the CFO’s sudden departure, at least not all by itself. Management reported a great quarter but quarterly reports are not usually submitted to an external audit process the way that annual financial reports are. It is at least extremely odd that a CFO would have to exit the scene on the eve of the release of a financial report, when the production and accuracy of that report should presumably have been his responsibility. I have no insight into the facts of what has been going on at Avigilon but at this stage I identify that lack of knowledge as a significant barrier to continued investment. It may be tempting to view this as a situation where a healthy and growing company needed to part ways with a CFO, who for one reason or another was not going to be a long term good fit for the company. But it seems to me to be at least equally likely that a CFO’s departure on the eve of a quarterly report release may indicate that the CFO was not willing to stand behind the numbers and representations that management had chosen to go with in the report. If that is the case, then it could call into question the very report that optimistic investors are using as their basis for remaining invested, or possibly for re-investing or increasing investment after the decline from recent highs. It also seems to me that the downward trend preceding this report was fueled at least in part by earnings in the prior financial report missing the Street’s estimates. I would also look back to the last equity financing, which was upsized midstream, and the need for which has yet to be made clear. Not that it is anything like too late for redemption but 5i’s own answer from a March 18 Q&A was as follows:

“With this deal being upsized now to $100 mm we are somewhat surprised. The company, if nothing is bought, will have way too much cash. We will need to watch the company closely. We will be none too impressed if Avigilon does not utilize its cash hoard within a two or three month period. For now, we will give management the benefit of the doubt, based on past performance and their comments.”

So the most recent events may not turn out to have been the first crack in the egg. Whether or not my speculative concerns turn out to be valid, these kinds of issues can prompt short sellers’ attacks, which can play havoc with an investment thesis and chase people out of a stock at lower levels. So all in all, the risks on AVO seem higher to me, and the very positive report that the CFO did not stick around to present is not the perfect answer. Caveat emptor – at least.

Q: avo
do you know management, and trust them ?
do you believe health issues as a cause for the departure of the CFO?
do think there may have been disagreements causing the departure?
has the recent equity together with the departure raise a red flag?
I am interested in buying more but want to know if you feel all is honest and management has integrity. The market seemed to believed in management and positively assess the results for an hour or so when the stock went up 10%ish but then it lost 6.7% at the close.
your advise would be appreciated
thanks as always .
Yossi

Q: 7 May Question by Jason re HCG: Can you define origination, pls.
Gary

Q: Hi 5I team!
Please explain why AVO is lower today than yesterday... did I miss something???

Q: Could you please comment on black diamonds results and if you think conditions look favourable for the company going forward. Is there any other company is a similar space that looks good right now?

Very appreciated, as always
Thanks

Q: While I thought that Home Capital's results looked reasonably good, the market does not appear to be overly impressed given the drop in the share price today, What is it about the results that the market does not like?

Q: Dear 5i team,

Can you please post your thoughts on Magna's earnings. Things look ok to me... not a "blow out" quarter but looks good. The stock sold off on the open and then moved back up towards yesterday's close.

Thanks!

Q: CGX
I hold Cineplex in my RRSP. I don't quite understand why the stock is down so much based on its recent quarterly report. Report doesn't look bad to me but perhaps I'm missing something. I like the yield on this stock and don't mind holding it for the long term but don't want to get caught in a long term yield trap. Should I be concerned with its lagtest quarterly report?

Q: Hello,

What do you think of Easyhome's q1reslts they just released? Looks to me that it was a nice quarter.

Greg

Q: Would you buy Tim Hortons now ? Thank you

Q: Avigilon AVO
I recall the same comments being said about another fantastic growth stock, Poseidon Concepts.
-market leading technology
-high multiple growth stock
-huge earnings growth

The timing is way too coincidental having the CFO resign right before releasing earnings. Unless he`s dead, health reasons is a bunch of BS.

Peter, is your team able to dig deeper and recognize any red flags for accounting irregularities? I noticed inventories have increased and they also recently did a share issue. Could the share issue have been one final grasp for cash?

The market is rarely wrong, over the longer term. CFO departures alone should not drop a stock 20% after the announcement.

Q: Are AVO and HYG a hold, sell, or average down? In the case of AVO, how did they hide what appears to me to be ongoing problem? The stock was highly talked about and recommended in the media. In the case of HYG, I had a stop limit in at 4.12 - 4.06, which went through and continued down May 7th.
Your thoughts.
Dennis

Q: Maybe management at AVO are not so naive at all. Maybe they wanted the stock to go down such that insiders could buy at cheaper prices. Just thinking.

Q: AVIGILON - AVIGILON - go figure!! But, look at the fantastic 1st quarter to March 31/2014. Records & even better!!!???
Peter, maybe you could tutor them for a little while on corporate governance, shareholder relations, etc. Do you think this was planned with a rollover of nearly 2.5 million shares?

Q: DD
DD wireless. there is an offer on the table for 2.25 from the majority owner. Looks good if not opportunistic. their quaterly result show a 10 cent profit per share, if we annualise this it makes for a very low P/E. is there any hope of better offer, or can keep my marbles in a good company. do the owner has a lot weight to bulldoze the minotity shareholders out at a good valuation for himself?
Thanks

Q: Newalta (NAL) earnings out on May 05 and they look OK and they raised the dividend. Could I please get your opinion on their earnings report.
Thanks