Investment Q&A

Q: As you are aware the biotechs are taking a beating. Can you offer your outlook.Thanks

Q: Hi Peter, Not sure what is going on? It is down 25% now for today? Reading your commentary does not look it is a bad buy at this point. I own 50% at $88 and rest at $65. Not sure if I step in and by some more now(for 5 years hold)? What is its next year PE with this price point? Also do you think financing and the merger both are 'done deal'? Can you please also do a little fundamental analysis on this for us?

Q: Michael Hainsworth made an allusion this afternoon on BNN's Market Call that Concordia will be meeting with potential lenders on October 1, in NY. I can't seem to find anything on this item, including CXR's own website. How does this figure into the greater scheme of things at CXR?

Is your advice, overall, to "hold" on this stock? I was in at $49, with a full position, so the stock is still "up" for me, at this point .... but who knows for how long?

Thanks for your help.

Q: Hi Peter,

Can you confirm whether or not CXR was able to complete the stock offering at $65 before things fell apart? If not, is the financing at risk given market conditions? Would this limit CXR's ability to close on the acquisition?

Mike

Q: I am a retired, conservative dividend income investor, with a well diversified portfolio of stocks, ETFs and mutual funds (AD, AQN, ALA, BCE, BNS, CGX, CPG, RY, SLF, WCP, WEF, WSP, XIT, ZLB, RBC Cdn Eq Inc, Sentry Cdn Inc, Sentry REIT, Insured Annuities, Fisgard Capital).

I currently have just under 5% invested in health care, primarily in TD Health Sciences, with some in Alaris Royalty's group of companies.

Question # 1 = what percent of my overall portfolio would you recommend for health care?

I have been waiting to top-up TD Health, which has just retreated to its 200 mda. Is the momentum of the health care sector waning, is it nearing the end of its seasonally strong period, or is it reacting to the Hilary Clinton comments, thereby creating a great buying opportunity? Bottom line = is now the time to top-up TDB?

Thanks for your help,
Steve

Q: Hi Gang
For someone that has no exposure to biotech and in view of the sector down swing. Where would I take an aprox. 3.5% position
today ?

Thanks much.

Q: i view myself as a fairly seasoned investor, but concordia has me stumped, they are raising money at 86.50 a share, supposedly the issue is 2 times oversubscribed.
so the stock opened down friday am and proceeded to go down 22 points before rebounding and closing down 12. my question is why would anyone participate in the share issue when they could buy the stock at a massive discount on friday or even this monday-- makes no sense. i did buy more myself when cxr was down 18 but the whole experience as peter would say is wonki, was it hedge funds in u.s. sitting on cxr on friday-- i think so and certainly hilary did not help.dave

Q: Do you have any idea who could be selling 4.7 million CXR shares today in the US market? Given an average daily trading volume of 10k shares, this looks much beyond a response to biotech/pharma weakness. According to the Sept 8 press release, it looks like Cinven would have a lock-up on their 8.5M shares. Is it possible the underwriters were selling today just to exit their position on the new offering? Thanks.

Q: Just wanted to point out something with respect to your comment on NHC for Maria.

NHC does trade at 26x 2015 earnings estimates as you suggested, but this number gets cut in half for 2016 (i.e. ~13x P/E). Is it really fair to look at 2015E for a hyper growth company in October ? I don't believe investors would value a growth stock like NHC on 2015 figures...especially when they set to double their EBITDA and earnings for 2016.

When one compares 2016 estimates, NHC is actually cheaper than DR. DR has earnings dropping from 2015 where NHC is set to double.

Please correct me if I'm wrong, but I don't find your comparison of one being expensive vs. cheap accurate at all.

Q: As I write, CXR is down over 11% on the day, and has lost more than a third of its value in less than one month. It is starting to remind me of PHM, which lost investor confidence and then more than two thirds of its value (so far). Are big investors bailing on Concordia or is it just the small investor reacting to downward momentum? It seems dumb to sell here but if this momentum continues it will be a forty dollar stock in a few weeks.

Q: Now getting absolutely shellacked - below $77. I know you've answered questions about this one today, but do you have any rational for this horrible action. No doubt the deal was not placed well notwithstanding the talk of it being over subscribed. What a joke!

Q: I have to admit that I am truly puzzled be the way the shares have dropped today to around $11 below the new share issue price. I was expecting that the shares night trade around the issue price of about $86 Canadian or slightly below. But $11 seems very excessive. What am I missing? And what does the market know that we don't? At the very least I would have expected the underwriters to maintain the share price close to the issue price in order to successfully market the shares. Where do you see the shares going from here?

Q: Dear 5i,
I currently own Concordia (3%), Gilead (3.5%), JNJ (1.5%,) Baxter (1.5%) and PHM (.75%).
Given the recent developments of CXR and PHM, I am considering adding 1% of one of these companies (CXR or PHM). Which do you think would be the better of the two for a 2 to 3 year hold. Or would you recommend something else in healthcare?
Thanks for your services!

Q: ok the issue has been priced 65.00 us which translates into about 86.50 cdn, cxr is trading a 2 dollars below issue price, what i am having trouble understanding if the ebita increase is going to be that much greater than the stock dilution when the deal closes, why did the stock go down so much and why did cxr price it here. secondly i know you like cxr and think the selloff is a bit overdone, would you buy more at 84.50.it seems most analysts see this stock going to 125 in short order. dave

Q: What do you think of CXR at this level. What would you suggest as a good entry point. By my math it's now trading around 12 times 2016 earnings? Thx Scott

Q: Hi team.
I have been following the recent debacle in this company and am aware that market sentiment is negative.However,looks like the fundamentals are strong ,management has proven itself in the past,and the company is poised to grow and turn a profit in 2016.Is this a value trap at these levels or a great buy due to "irrational" behaviour from sellers.When would be a strong signal to BUY?
many thanks,
Jean C.

Q: With the current sell off both of these seem to be attractive. What are your thoughts on taking a position immediately and which one would you choose. Thanks

Q: Would you please provide your favourite 5-10 health care stocks? I have US dollars so that would be my preferable currency but can certainly convert some to CAD. Would you also list them in risk order with the least risky first? ETFs are fine as well. Thank you.

Q: I am thinking of switching some funds within my portfolio healthcare allocation by selling PFE to purchase GUD based on the many positive statements that you have made about Knight and the recent 5i report on the company. I find GUD an interesting company but difficult to value relative to PFE. Income is not required from the holding, and invested funds are not required for 5 years plus. Do you believe that there is enough upside to GUD to offset realized capital gain taxes on a PFE sale, loss of the PFE dividend stream, possible additional future currency gains on PFE, and additional capital gains potential on PFE as they improve their operations further? In other words, are you confident enough in Knights upside potential that you would make the switch in your portfolio if you currently held PFE?

Thanks!

Q: Valiant been down large the past few days, what's going on with company. thanks