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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 do not ask many questions, i am a seasoned investor but ecn has me stumped.
hudson did an amazing deal-will close within 4.5 months from now and payout 7.50 a share to shareholders-the stock should be at 15-16, i saw the interview with hudson on bnn -he is a shrewd as they come-he said they will only do tuck in acquisitions for now because prices are to high.the market is valuing ecn like after deal closes the stock is worth 2.50 -is this the greatest opportunity to buy this stock or am i just wrong. dave
Read Answer Asked by david on August 12, 2021
Q: Hi 5i,

I own the Preferred shares of ECN. They have just sold a major part of the business and are going to pay a special $7.50 dividend to the common shareholders. The way I see it, are they not taking away a lot of the security of the preferred shareholders by paying such a large common share dividend? Do the preferred shareholders have a voice in this matter? Can the company just dividend out everything leaving the preferred shareholders holding a worthless piece of paper?

Your thoughts on this are appreciated.

Read Answer Asked by John on August 12, 2021
Q: A follow up question to your earlier response. If the company is paying such a high special dividend does that mean that Mr Hudson and the board did see better uses for the proceeds? After the sale the company will be much smaller, slower growing (from what I can tell but I may be wrong) and without the cash available to grow meaningfully by acquisition. Do you think this is the start of the end game for ECN where the rest of the company eventually gets sold?
Read Answer Asked by Richard on August 12, 2021
Q: I am sure you are tired of ECN questions by now, but I have to ask;)

Do you have a good way to evaluate what the leftover divisions of ECN will be worth on a per share basis?

I assume one can't simply equate the amount of revenue left over.

I am not skilled enough to figure that out, but I am sure someone is.

Is there a bit of a disconnect here or are the left over segments only worth ~$3.5 a share.

As always, thanks for the great service.

Read Answer Asked by Colin on August 12, 2021
Q: I'm thinking that I want to remain invested in ECN because I like how they think and their results. I'm thinking of buying more shares in the coming days which ended the day barely up from the day before and I expect it will not fall the full $7.50 when it goes ex-dividend which would give me the post-dividend shares at a cheaper price than buying later. I would do this in my RIF and TFSA so there is no resulting tax. What do you think of this idea?
Read Answer Asked by Earl on August 12, 2021
Q: Could you enlighten me about just why ECN is selling off a big chunk of their business and then paying a special dividend to shareholders? From what I can see and what you've said so far it will go from a $2.5 billion dollar company to a half billion dollar company. It will pay us $7.50 a share in a special dividend, but then the value of the shares we hold will likely drop by the same amount, if not more, since larger investors will probably abandon the newly shrunk company. So where is the benefit for shareholders in this action?
Read Answer Asked by John on August 12, 2021
Q: Can you please comment on a special dividend that would be paid $7.50. Stock is only up .22 cents right now. The stock should go up by at least $7.50. Do you think the stock would move up by at least $7 to 7.50 once the date is announced? Do you consider buying the stock to collect the special dividends?

Am I missing something here? Do you expect the deal would not be completed?

Thanks for the great service
Read Answer Asked by Hector on August 11, 2021
Q: With something like 2/3rds of ECN valuation coming back to me as a dividend (!) I will be losing a fair bit of my financial exposure within my portfolio. I do like the smallcap Fintech space. Do you have any suggestion on where to start looking to gain more exposure? I have GSY on a full tank and so not an option. Should I buy more ECN now or wait?
Read Answer Asked by Gerald on August 11, 2021
Q: I currently own Fair Isaac (FICO) and it has done very well the past few years. Recently the stock has been dropping. I'm assuming it's based on the current news. Apparently the US banks are using the Fico credit score less and are starting to use their own credit score system. Also congress is proposing to create their own credit score system. All this means that there could be less business for Fico going forward. Should I hold or starting trimming my position in Fico?
Thanks
Read Answer Asked by Ben on August 11, 2021
Q: Hello:

Could you explain the difference between TSU and BAMR? Could you also explain the Reinsurance industry? With TSU doing very well recently and the BAMR spinout, it seems like a developing field ie good growth investment potential. Which of the two would you pick from a more conservative, balanced perspective?

My thanks.
Read Answer Asked by David C. on August 10, 2021
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