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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: Hi Peter and Team,
When Jason Donille was on BNN's Market Call a day or two ago, he commented that as a result of the recent plunge in its share price to $40, CXR's PE ratio has now dropped to 4x. But according RBC's web site, at today's closing price of $35.33, CXR has a PE ratio of 52.2x. Would you please comment on this huge discrepancy between the 2 PE ratios as quoted on BNN and RBC's web site, respectively.

Regards,

H.S.
Read Answer Asked by Harry on October 21, 2015
Q: Latest update from CXR:

http://www.newswire.ca/news-releases/concordia-provides-update-on-term-loan-financing-and-reconfirms-blended-interest-rate-of-approximately-725-post-amco-acquisition-534766791.html

The loans in connection to the financing of AMCo have been fully allocated and CXR has reaffirmed the 7.25% blended interest rate.
Read Answer Asked by Arneh on October 20, 2015
Q: A follow-up regarding the senior notes announced today at 9.5%.

Per http://concordiarx.com/concordia-provides-update-on-amco-financing-and-capital-structure-post-amco-acquisition/ , the maximum blended interest rate (including the new $790m of senior notes) is 7.25%. Therefore, if I'm understanding correctly, the senior notes announced today aren't priced any higher than CXR was expecting them to be on Oct. 15.
Read Answer Asked by Arneh on October 20, 2015
Q: Hello Team,
there have been more than enough inquiries about this company, here is another. Today, a 'Marketwatch' article indicated that the company has now determined the issue of unsecured senior notes of US$790m at 9.5%. There appears to be a negativity about the company and its difficulties in financing the acquisition. Would you be able to find out with respect to short sellers whether the stock suffers from serious manipulation? And if so, why is there no news from the company?
Communication should be key!
Thanks
Read Answer Asked by Sigrid on October 20, 2015
Q: What's your take on the recent press release by Concordia regarding the offering of senior notes?

http://concordiarx.com/concordia-healthcare-announces-pricing-of-offering-of-senior-notes/

CXR seems to be conducting business as usual, getting deals done and closing the AMCo acquisition. The continued hammering of the share price is baffling.
Read Answer Asked by Arneh on October 20, 2015
Q: CXR hit $35. I have two questions. First, Jason Donville said that he called brokers and was told that a lot of the shares were owned on margin. Can we trust it is true and can we verify this using a bloomberg terminal or website? If not, it seems like a good way for a portfolio manager like him to encourage us to buy the "bag holders". Secondly, there is news today about Concordia offering "senior notes". Is there something not to like there? I don't know what "senior notes" are. Thank you!
Read Answer Asked by Matt on October 20, 2015
Q: Is CXR a compelling buy yet or stay away? I have been holding off adding to have a full weighting in my position. The financing terms were obviously unfavorable based on the plunge today but at least it's done. My cost is substantially higher. what are your thoughts?

Thank you
Read Answer Asked by Douglas on October 20, 2015
Q: Hello Peter,
This is just and example but wanted your opinion. If you had 20k and the amount represented 5% of the portfolio, how much would you put into the 4 stocks: cxr, vrx, phm, nhc. I was thinking 10k cxr, 5k vrx, 2.5k phm, and 2.5k nhc. Appreciate your comments.
Read Answer Asked by umedali on October 20, 2015
Q: I know, another PHM question...

In 2015 they acquired $161 million in businesses:
- Black Bear Medical = $10.3 M
- West Home Health Care = $14.2 M
- Legacy Oxygen = $4.2 M
- Sleep Management = $98 M
- Patient Aids = $34.3 M

In addition, their pre-2015 businesses were generating $35 million in revenue and $8.8 million in EBITDA.

The market value of PHM is now $117 million.

Assuming they didn't overpay for the 2015 acquisitions, I'm just wondering how there could be downside concerns, beyond the short-term, from here? Thanks
Read Answer Asked by Darcy on October 20, 2015
Q: With phm at new lows daily.The stock is obviously telling us something is wrong.What would make you go to a sell on this stock?Obviously the fundamentals would make your decision.The stock to me looks like .30 is where support comes in.Would there be good value @30 cents based on the new revenue guidance?
Read Answer Asked by glenn on October 19, 2015
Q: I'm considering investing in this medical technology company based in Ireland, and would like your opinion on its stability and growth potential. Is it still a good buy at $74.
Many thanks
Read Answer Asked by Janet on October 19, 2015
Q: There has been considerable turmoil in PHM stock price in the last week or so.

Looking back, we see the signs of momentum reversing from those that pushed it higher and now the same crowd walking away from it. People are voting with their feet mainly from fear and from people taken the advice from the President's Letter.

I had a specific question about PHM. They mentioned that the LOIs on the acquisition table are being actively negotiated to be 'all-cash deals'. How successful can these with the incentive for part or in whole stock-based details off the table now?
Read Answer Asked by Eugene on October 19, 2015
Q: Hi,

Some of the selling in PHM is being prompted by analysts who were earlier recommending it and now backing away from it. Also, the company has revised 2015 annual run rate to 155M from 200M in their updated investor presentation. I think this has to do with their low share price making it difficult to finance new deals. What do you think?
Read Answer Asked by Imtiaz on October 19, 2015
Q: I just found this info. DO you guy's have a opinion? I can find nothing that has changed here except the market perception of the sector. Would you hold or sell especially after the beat down Friday afternoon.
thx for your opinion
Read Answer Asked by Dave on October 19, 2015
Q: .give your assessment of this stock,please

thank you
Read Answer Asked by Don on October 19, 2015
Q: CRH is taking a real beating today. Do you have any idea why beside the fact of the sector it is in. You previously described this as high risk but also continued to like it. I also remember you saying don't get nervous an a bad Friday afternoon.
thx for any help
Read Answer Asked by Dave on October 16, 2015
Q: BNN reported that they are having a hard time raising the debt is this as bad as it sounds?
Read Answer Asked by Dan on October 16, 2015
Q: How much worse could this media nightmare get?

Reading everything that I can get my hands on, re: Concordia, the consensus is that "everything is fine" in the accounting department, and once the media flak settles down, this is still a good company, overall. We may all be in for quite a ride, but it will survive. That's what everyone is saying.

Nonetheless, does this not beg the question why they did it at all, and why they did it this way? The more I read, the more it makes me think that this is a case of the cobra swallowing the elephant: everything is digestible, but how long will it take; and while things are being digested, will the cobra survive, or starve on its own cleverness?

Read Answer Asked by Sylvia on October 16, 2015
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