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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: Growth Portfolio: As of Sept. 30, 6 stocks plus cash accounted for greater than 51% of the value in the portfolio. Excluding cash those same six stocks accounted for about 47% of the investments. There are 8 positions of less than 2%.

Is this a just case of a limited universe from which to pick or a reflection on the top positions having the greatest potential and the small positions are, for lack of a better word, fill?
Read Answer Asked by Keith on October 22, 2021
Q: In the growth portfolio you bought REAL for $12.95 and sold it, per your Oct 12 update, on a day when the highest price it traded at was $9.81, locking in a 24% loss. If you "like the industry and the company's fundamentals continue to look decent," isn't this a classic case of "buy high, sell low" when nothing but sentiment has changed in the company's long term outlook?

Analyst consensus EPS is $0.47/share in 2022 and $0.56/share in 2023. If such earnings materialize, this would be 19% growth in earnings for a company with no debt. I know it's a big if, but if REAL does achieve $0.56/share in 2023, traders selling it today would be selling a stock with estimated 19% growth in earnings for only 17 times 2023 earnings. What am I missing?

I took a quick look at the 5I Growth Portfolio and found that a couple of your big losers, QST and MRS, are bigger losers than REAL and have no earnings and/or none forecast. Why not sell these instead of REAL?
Read Answer Asked by David on October 22, 2021
Q: Please correct me if I've missed something but it appears that there are only gold focused metals/mining stocks in the materials category of any of the three 5i portfolios. Could you explain why you have no other metals covered and if you expect that to change in the next short while.
Many thanks.
Read Answer Asked by Alexandra on October 21, 2021
Q: In response to Justin’s question about the short leash for XBC I wonder if you could comment on my rationale for holding onto this stock despite also being down about 50%. I agree with 5i’s principle of the longview of 3-5 years for growth stocks if no material change presents itself. As for XBC I remain positive for the following reasons: it seems much of the difficulty is COVID related, the board has taken concrete positive steps to rectify weakness, the business model has diversified significantly, the sector is just getting started and there should be years of tailwinds. In following your advice to invest for the long haul in growth, not get emotional about the volatility that presents itself in this space and the feeling that markets in Canada tend to overreact to news much more so than in the US, could you make the case for those like me that would like reassurance that XBC remains a viable position to hold based on valuation and potential.
Read Answer Asked by Warren on October 21, 2021
Q: Just announced, Mission Ready Solutions Inc (“Mission Ready“) (TSX Venture: MRS) (OTCQX: MSNVF), a provider of comprehensive government contracting solutions, announces that it has granted incentive stock options (the “Options”), pursuant to its stock option plan (the “Plan”), for a total of 4,800,000 common shares of the Company, to certain directors, officers, employees and consultants of the Company. The Options, subject to the terms of the Plan and the corresponding option agreements, are exercisable at a price of CAD $0.25 per share for a period of up to 5 years.

I bought in at basically double this option and others maybe more. My initial reaction is disapointment. It seems management is being given a potential reward for bad performance.

Is my reaction "emotional" and perhaps there is good reason for this?.
Thanks John
Read Answer Asked by John on October 21, 2021
Q: Hi 5i,
A problem I have is selling winning stocks when I think they've reached their zenith, only to watch them continue to rise. Right now the "SELL ATZ" voice in my ear is pretty insistent and I need some counselling.
Given ATZ pays no dividend, the only reason to continue holding is more capital gain - do you think that's in the offing or do the underlying numbers and market circumstances suggest it's at or close to its zenith now, at 50 bucks?
Thanks for your thoughts,
Peter
Read Answer Asked by Peter on October 19, 2021
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