Investment Q&A

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

Q: Just ask a question ,,,, seems to be missing some insite on current situation ,,, Sep 21, 2015 (MarketLine Financial Deals Tracker via COMTEX News Network) -- Concordia Healthcare Corp., a Canada-based integrated healthcare company, has filed a preliminary prospectus supplement with the securities regulatory authorities in each of the provinces of Canada and a corresponding registration statement with the US Securities and Exchange Commission (SEC) to issue 8 million common shares in a public offering.
Based on the closing price of Concordia Healthcare's common stock of $72.23 per share on Sep 18, 2015, the transaction is valued at approximately $577.84 million.
Goldman, Sachs & Co., RBC Capital Markets, LLC, Credit Suisse Securities (USA) LLC and Jefferies LLC are acting as book-running managers for the offering.
Deal Value (US$ Million) 577.84
Deal Type IPO

Q: CXR adding 8 million shares to the float. With the apparent 35 per cent accretive to earnings with their new acquisition do you see huge share dilution in earnings per share or a good increase once things get going?

Q: I know PHM isn't part of your coverage universe, but if it was, what kind of rating range will it receive?

Q: Could I have your thoughts on the drop in share prices pretty much across the board here: e.g. VRX, GUD, PLI etc.
A sector shift? Profit taking?
Time to sell? Or time to buy?
Perhaps sit still and do nothing?

Thanks.

Q: Your last comments on this little company were about a year ago. Since then it has almost doubled market cap. Volume is now averaging 150-200k. Things seems to be happening. Any comments you may have on this company would be much appreciated as I am looking to add to a tiny position.
Thanks as always.

Q: Would like your opinion on crh,
lots of interest in this one out there,recent u.s. listing, added to
Sp/tsx small cap index, several$7
12 mo tgts. Thank you.

Q: Hello Peter and Company,
Will the division of NRI into two companies enhance the total value? Should one hold ?
Thanks. Bill.