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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: As of today (Feb 13th 2021), this company has a market cap of ~ $1.5 Billion. However, from what I can see (on SEDAR), it has not even come close to having a positive net income or cash flow since its existence. Am I (as an investor) missing something very obvious, of is this just another sign that there is a "bit of exuberance" in the current market ?
Read Answer Asked by Mike on February 16, 2021
Q: My research drudged up this on Kaleyra, do you agree or have anything to add? Was thinking of starting a position.

A cloud computing company offering communications solutions. The company’s SaaS platform supports SMS, voice calls, and chatbots – a product with obvious applications and value in today’s office climate, with the strong push to telecommuting and remote work. Kaleyra boasts over 3,500 customers, who make 3 billion voice calls and sent 27 billion text messages in 2019 (the last year with full numbers available).
Over the past 6 months, KLR shares have shown tremendous growth, appreciating 155%. Kaleyra’s revenues have grown along with the share value. The company’s 3Q20 results hit $38.3 million, the best since KLR went public. While Kaleyra still runs a net earnings loss each quarter, the Q3 EPS was the lowest such loss in the past four quarters.
“Over the past few years, Kaleyra has posted double-digit revenue growth and positive adjusted EBITDA. We forecast revenue growth of 9%, 22%, and 28% for 2020-2022. We project adjusted EBITDA declines in 2020 to reflect public company costs and COVID-19, but growth at over twice the rate of revenue for the following two years. We expect benefits from operating leverage, low-cost tech employees, cost volume discounts as the company expands, and margin improvement from new offerings and geographies. Over the longer term, we believe the company can grow revenue close to 30% with even faster bottom line growth,” .

Read Answer Asked by James on February 16, 2021
Q: (Part 2 with 6 new companies) I watched a presentation on Saturday where analysts fielded audience company suggestions and whittled them down to a few that they felt could 10 X in a reasonable time frame. I am wondering if you can look at this six and rank based on potential? For the top two, it would be great if you can discuss the TAM, impact of market value and shares outstanding, if they are solving a new problem/creating a new market and quality of management. Basically, why those two?

ATOM
API
AFRM
VERI
TGTX
EXEL
Read Answer Asked by Tim on February 12, 2021
Q: Does this make sense? Thanks!
This is an incredibly simple idea for any Tilray shareholders but it is also a good one. Tilray (TLRY) and Aphria (APHA) are combining. They will become one, probably by August. So if you own Tilray, you will still own TLRY shares by then. If you own Aphria, you’ll own TLRY shares by then, too. But if you invest the same number of dollars in Aphria, you’ll end up with more TLRY. More TLRY is better than less. Today, the deal is worth $53.51 in TLRY shares for each Aphria share you own. That is a $27.21 net spread above today’s Aphria market price.
WHY?
EACH Aphria share WILL GET 0.8381 TLRY shares.
Read Answer Asked by Austin on February 12, 2021
Q: I need some help determining if/when I should sell some of my winners. I've more than doubled the money I invested in the above names and so I feel inclined to sell enough shares to recoup all/some of my initial investment. I'm worried that may be overly cautious though and I should hang onto the winners to see larger gains.

Can you outline some of the things I should be considering to help me make this call?
Is the better option to stay 'dispassionate' and just sell if any of these holdings rise well above a full position?
Given the price increases, I currently have a half-position in each of LSPD, WELL, PBX and a full position in each in SKYY and IGV.
Thanks for all the help, you have been really great guidance
Michael
Read Answer Asked by Michael on February 11, 2021
Q: I own all for of these companies, totalling about 4% of my portfolio. I'm happy with all of them but I wonder if there is too much overlap between positions and if I'd be better off consolidating. Could you rank in order of both growth potential and risk?
Read Answer Asked by Robert on February 11, 2021
Q: Hello 5i. In your watchlist, what companies are in your top 10?
Read Answer Asked by Fabio on February 11, 2021
Q: Hi. Can I have your views on the following scenario: Currently Canopy Growth is sitting at a market cap of 21B. Aphria + Tilray at about 13B. If I am not mistaken, Aphria + Tilray beats Canopy in all the important financial metrics. Does Canopy have a better future growth profile then Aphria + Tilray, or is there a market mismatch here? (APHA up 13.5% today...)
Read Answer Asked by John on February 09, 2021
Q: Responding to Wilson on Dec 21 you stated that Acuity Ads was moving up based on a "comparable valuation move" relative to TTD based on "price to sales" and that "momentum in the stock is about the best we have seen".  Valuation relative to competitor MGNI was also mentioned in your response.  Since then AT is up approx 40% while TTD is flat, and MGNI has more than doubled.  Please provide an update on the current relative valuation of AT, TTD and MGNI using the price to sales metric (and any additional metric that you feel may be relevant).  Do you consider AT to still be significantly undervalued relative to TTD and MGNI?  Looking ahead, is it a takeover target?  Do you think that the current momentum on AT will push it higher?  Are there any catalysts on the horizon that may push it higher?  Thanks to 5i I have a substantial position in AT with a cost base of $1.46.  I really like to let my winners run but sitting on a holding with a 19x gain, I need to decide if/when to liquidate some of the position.....thank you.
Read Answer Asked by Glenn on February 09, 2021
Q: Hello Peter,
With the US elections and the senate win by the democrats, I was expecting that the US cannabis stocks would surge alot more than the Canadian ones. However, this is not the case and am wondering what that is.. For example. if you look at Aphria and Tilray, and Organirams, they have surged alot more than companies that are actually making money like Curaleaf in the USA .. Do you think this is because US companies are not surging as much due to them being on CDNX (not on TSX or NYSE) and may not be readily available for US investors..Also, can you comment on why Medmen is going through the roof in the last 5 days..? thanks very much
Read Answer Asked by umedali on February 09, 2021
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