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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: A year ago, Knight signed a deal to distribute 3 of Advaxis's products in Canada and bought about 400,000 shares at $13.91, a premium at the time from the Advaxis treasury. The shares tanked to $5, recovered to $8 and have jumped %6 to $14 in the past 3 days on the announcement that Amgen bought worldwide rights to another Advaxis drug and gave them $40 Million. This will help Knight as the shares appreciate but will it hurt their deal on the other 3 drugs they represent as Advaxis may concentrate on the behemoth deal with a super-large pharma co. and neglect their other products.
Knight's share price has help up well during the healthcare decline. Do you think they will one day do a big deal or continue to drip out their $600M in miniscule does? I am sure this company will be a blockbuster some day, but I may not live long enough to see it!
Thanks.
Read Answer Asked by Steven on August 05, 2016
Q: I would like to increase my investment in the Canadian health care sector. I am looking for yield. What are your top recommendations? I already have enough Sienna (SIA) and Chartwell (CSH.UN). Pharmaceuticals and laboratories interest me.
Read Answer Asked by Carl on August 04, 2016
Q: I am sure by now 5i must roll its collective eyes at the sight of another CXR question.
I don't own the stock but find it fascinating. Some analysts predict 2017 earnings to be $4-5 per share or even higher. Globeinvestor has their debt to equity at about 3x. My questions are these:
1. what is the major risk that the anticipated earnings don't materialize? gov't intervention? or is there fear that like Valiant there may be some misrepresentation on the books?

2. if debt to capital is 3x, that would mean that there is approx. $60 of debt per share, given a $20 share price. correct?

3. if they are paying an average of 5% interest on their debt, wouldn't interest alone eat most of their earnings? i.e. $3 per share would go just to interest. seems like it would take a very long time to get out of debt.

4. seems like it will be almost impossible for this company to grow by acquisition for a long time, given the environment. almost like a game of musical chairs where the music has stopped for a final time and there is no reason now to own the stock other than value. true?

Thanks for your patience with us as we try to figure this market out.

Cheers
John

Read Answer Asked by john on August 03, 2016
Q: http://investors.cvshealth.com/~/media/Files/C/CVS-IR-v3/documents/02-aug-2016/2017-standard-formulary-list-of-removals-and-updates.pdf

This may be another part of the reason for the sell-off today. Nilandron appears to have been added to the list of drugs to be removed at CVS for 2017 due to hyperinflation. I'm not sure of the implications as far as the percent of Nilandron historically sold through CVS. I would assume they'd re-negotiate pricing and take a bit of a hit?
Read Answer Asked by Mark on August 03, 2016
Q: Peter & Team, as to the question from Dennis today, the company needs to begin reporting organic growth in Covis and AMCO, preferably be summarized product category. We cannot wait until they cycle up against these acquisitions by end of year to see comparables; we need to know if things are better or worse from when they bought these products. And we need to know it August 12th when they report the quarter.

Reporting against target EBITDA of $610 to $640 million and Net Debt/EBITDA of 5.5x is not cutting it (obviously).

If management won't disclose product growth prior to acquisition date or if there is no constant currency growth, would that not be 5i's cue to cut and run?

Thank you.

Read Answer Asked by Keith on August 03, 2016
Q: Seeing all of the questions about the big drop today and having purchased at higher levels i agree that it's a really frustrating stock. However, i read today that Taylor Asset Management (David Taylor of Dynamic fund fame) and Davis Rea (John O'Connell) actually added to their positions at the end of Q2. They seem to be looking at the fundamentals without emotion and see the value in the company
Read Answer Asked by Richard on August 03, 2016
Q: What the heck is going on with CXR?? It has tanked again today down over 16%!
Was there any News in particular that came out this morning? what is the specific reason for such a huge sell off today? I'm weary of the losses I have incurred on this position as it continues on its downtrend amidst the short sellers. I'm down over 50% and think I should throw in the towel....your thoughts on my thoughts of selling? Is there any glimmer of hope for this company in the near term?
Read Answer Asked by Jan on August 02, 2016
Q: Hi,

CXR continues to make new lows. It also trades on the U.S market, where U.S. investors just see a stock continually going down, and it is heavily shorted by U.S. investors. Years back, Jennifer Dowdie, then an editor for the Investors Digest, now with the
Globe & Mail, really liked Sino Forest. Hence, a lot of people owned this stock. Carson Block started shorting this stock and driving the price down... just like with valiant pharmaceuticals. Canadian analysts came on business stations and started criticizing him. In the end, just like valiant pharmaceuticals, he drove the stock way down in the case of Sino Forest right to 0. Is there going to be a time when you will tell us to cut our losses with CXR? Could you guys please do a feature on this stock and publish it? A lot of your customers have holdings in this stock.

Thank you,
Dennis
Read Answer Asked by Dennis on August 02, 2016
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