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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: Would there not be an opportunity cost by buying Knight now instead of a couple of years from now, since you keep saying that it is a five year investment, thanks?
Read Answer Asked by Pat on October 25, 2015
Q: I was reading the latest TD analyst report (dated Oct. 22, 2015) regarding CXR and was a bit frustrated that they significantly lowered the price target not because of the earnings expectations for the company but on overall sector valuations/conditions (I would say this was primarily driven by Valeant). It seems the report was reacting to recent market events (which can quickly turn around) more than anything else, and doesn't seem to take into consideration that there will be a guidance announcement this coming Monday Oct. 26. Thoughts?

On a side note, is there a way to obtain all analyst reports for a security without paying an exorbitant amount? I have access to TD reports because I trade through TD Direct Investing but not much else.
Read Answer Asked by Arneh on October 25, 2015
Q: i do not own valeant or concordia-- i do own knight, crh and some others,but the article by ryan modesto on valeant leaves out the key point of this whole debacle--- this negative post by the short seller brought down the whole healthcare space across all spectrums and this to me is what the jason donvilles are really raving about-- it is totally unfair and wrong. i side with donville 100 per cent, this type of sensationalism and negativity must be eliminated. even if the short sellers post is true, it represents about 10 per cent of vrx revenue, which begs the quesstion should the whole healthcare space have been hammered the way it was?i think not,scary stuff.post if you want. dave
Read Answer Asked by david on October 25, 2015
Q: Hello team,

First thing on Monday 26 Oct, I am moving to buy 500 shares of VRX. This will account for roughly 10% of my portfolio. I am even tempted to buy 1000 shares depending on your honest answer to the following question:

Is this a one time opportunity to invest in a good company suffering from unfair publicity or is this a moment of greed which has blinded many to see a broken story?

I have seen the interview with Jason on BNN and I am sorry for not buying VRX when it reached 116$....if Jason is right this company is worth north of $400/share. If Jason is honest and I know you respect him a lot, then why should I (or everybody else) hesitate and lose this golden opportunity? Or is he telling us all of this because he is massively invested in VRX and he is looking out for himself first.

I know you don't like target prices but is it even a possibility for this stock to see the light of $250/share ever again.

I know you will refuse my weighting in the company but I am more interested in your genuine and personal trust in the company's management and what the company is doing (borrowing to grow ROE at all costs) as well as your desire to invest in this company after all is said and done...., Today?

Love to hear back from you. I know your long-term investment logic and wisdom are the only thing that could stop me from making a deadly mistake. So thank you in advance.
Read Answer Asked by Saeed on October 25, 2015
Q: Dennis Mitchell gave a more grounded interview on BNN regarding the Valeant - Citron debacle, in my view. In short (oops!) he suggests it's the investor's responsibility to fully understand the business they have bought into regardless of what any research piece, pro or con, says. Further, Buffett would suggest a 'margin of safety' shield any purchase you are contemplating and that volatility can be your friend if you understand the underlying business. Read lots (not just 5i) and take the time to ponder before your purchase but in the end you are responsible for your investments, not the media, not the research firm, not any politicians.
Post at your discretion.
Tim
Read Answer Asked by Tim on October 24, 2015
Q: GUD is apparently well positioned. They have money and they have the skill set. Waiting for it to move is seemingly like waiting for Godot. When do you think they might pull the trigger with the money they have and make and investment? See you at the show.
Read Answer Asked by Jim on October 23, 2015
Q: Could you explain, in general terms, how companies like CXR (and I suppose VRX) actually thrive? CXR buys an existing company, but how do they become so successful? Do they somehow unlock synergies to cut costs or increase sales, or is it just price increases? Or is it that they somehow are able to purchase these companies at a great price, and if so, why would the existing owner sell at such a low price? CRX has levered itself to buy their most recent company, but why is this such a great deal? Thanks again for your insight!
Read Answer Asked by Donald on October 23, 2015
Q: Hi guys. I own XLV.us, IWO.us, CXR, SIS, SIA, and PLI all varied weights and losses or slight gains in different accounts for a total weight dropping to 7% and dropping more. My question is do you see any of these as a Sell for the time being (perhaps a year or so)..to be bought back when the sector starts to look better. and freeing up cash for better places to hide. Perhaps GUD??? Thanks for your tireless support! We cant do it without you.
Read Answer Asked by El-ann on October 23, 2015
Q: Hi guys, again.

Feel free to take your time on this one and dont post publicly if you feel it adds zero value to the discussion.

I was reviewing Citron's twitter account and it looks like they only took notice of Valeant after Hilary Clinton's tweet, promising drug pricing reform. Citron Research's first tweet on Valeant, that I can find, was on September 28.

Do you think its possible, Citron, noticing Valeant's reaction to Hilary Clinton's tweet, decided to only then initiate their short attack on VRX by simply packaging the questions that have always surrounded Valeant in a nice neat report?

Imagining a world where Hilary Clinton never sent that tweet, would Citron have thought of to initiate their short on VRX? Would they have the courage of their conviction to place a $50 price target on VRX?

If you think Citron's report on Valeant took months to research and create, then obviously, the above timeline doesn't work out as Hilary first commented on drug pricing reform in late September.

So which do you think it is? (1) Citron was working on their report previously and independently of Hilary's comments or (2) Citron noticed the weakness in Valeant's share price, after Hilary's tweet, and smelling blood in the water, were opportunistic in deciding to create their short report.

Thanks again for your insight.

John
Read Answer Asked by john on October 23, 2015
Q: Peter and Co.
I have 3% in Canadian healthcare stocks, CRH and PHM. Would you buy CXR today? Is it catching a falling knife or has it started it's rebound (up 18% yesterday.)
To me it looks like it has a ton of upside, but I don't think I could handle another PHM haha! cheers
Read Answer Asked by Andrew on October 23, 2015
Q: What is your view on ZUH? Is it and the sector breaking down or just a setback? Would you add to the position.
Read Answer Asked by Jacques on October 22, 2015
Q: It may be that some of the money leaving Valeant is going into more established names like Gilead. Its up over 6% today.
Read Answer Asked by Murray on October 22, 2015
Q: Valeant Pharmaceuticals and Concordia in the last few days have been absolutely punished. What has been the rational as they are currently at ridiculously low PE's and seem to have a strong balance sheet and pipeline. Is this a good buying opportunity?
Read Answer Asked by Luigi on October 22, 2015
Q: In your estimation will the Healthcare sector be effected by what is currently happening to Valeant, Concordia, PHM etc. It's the old cockroach theory. An ETF such as ZUH or comparable products might not be immune. Would it be wise to avoid this sector until the dust settles? Would it be wise to get out entirely for the time being?

Thanks
Read Answer Asked by roland on October 22, 2015
Q: Hello Peter & 5i team,
I'm quite frustrated at the way the market reacts to a Citron report whose motivation is quite questionable; is it not possible that their report is so designed as to support their objective of shorting the stock?
Supposing their report is misleading, how is it possible that they can get away with it with impunity?
Now that the QSC starts investigating Valeant, who is investigating Citron?
Regards,
Antoine
Read Answer Asked by Antoine on October 22, 2015
Q: Team:

What does Valeant do?
Research. Little or none.
Piles on massive amounts of debt to buy companies. Raises prices.
May or not be stuffing the channel to record higher sales.
Accounting is probably aggressive.
Been around for 49 years seen this story before.
The debt or the deception will get them in the end.
Reading your answers you do not seem to have the same level of concern.
One of the earlier questions got this right.
PANIC.

Read Answer Asked by ian on October 22, 2015
Q: Good day, I am not risk adverse and sometimes that can get me in trouble. This stock looks like it is overblown to the downside. I know you would never recommend it but if my Healthcare allocation is ~5%. Would now be a good time to load up, maybe beyond a full position in this stock, or is that too dangerous with it falling like it is? I am thinking just above 5% of my portfolio?
Read Answer Asked by Colin on October 21, 2015
Q: Regarding Maida's post on CINVEN buying 7.2M shares today. Is that news accurate. I've been trying to find any news on internet (incl. their webpage) to no avail. Someone at stockhouse.com says news came from Reuters (couldn't find anything). Have you guys verified this? If so, maybe you can provide the link.
Thank you!
Read Answer Asked by Silvia on October 21, 2015
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