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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, Ryan, and Team,

Sorry for yet another question about Xebec. I realize that stocks in the growth portfolio are by nature quite volatile, and since this holding is in a TFSA, and XBC closed today (Friday) with a loss in the account of 36.6%, we're wondering (based on your long experience in bull and bear markets or when a particular stock runs into difficulties), what kind of timeline we 'could' expect to recoup this loss.. We're aware that the 'green' sector, of which Xebec is a key player, stands to benefit from environmental initiatives and programs from different governments, including our Canadian regime, and the Biden administration, among others. However, since Xebec's problems appear to be somewhat company related, what advice can you offer? I should add that we both are fortunate to have defined-benefit pensions, and don't need the TFSA funds, but it's certainly gut-wrenching to see such a loss in one day! Your guidance is always greatly valued.
Read Answer Asked by Jerry on March 13, 2021
Q: Good Morning Peter & Team,

Lots of questions have been asked already. Everyone will be in the red on this one I am sure. Things happen.

My Question? What would your bottom line advice be today? Sell and take the loss ahead of quarterlies in 2 weeks? Or hang in there and look towards a rebound in the coming months/years?

Thanks for all you do

gm
Read Answer Asked by Gord on March 13, 2021
Q: Hello 5i team,
On the 5i website, for EIF's company description, it says that they focus on 2 sectors namely aerospace/aviation services and equipment/manufacturing.

As the pandemic wanes, will this company's fortunes improve or is this already factored into the share price(since the share price is close to an all time high)?

Is equipment and manufacturing still in the aerospace/aviation sector, or is it generally in sectors entirely different?

Thank You,
Andrew

Read Answer Asked by Andrew on March 12, 2021
Q: I have an average cost base of $190 for Kinaxis. I still think it is a good company but was thinking it is maybe time to take a capital loss and move on. I was wondering if there are companies that you prefer more at current valuations and growth potential at this point in time? Or is Kinaxis at the top of the list and I should stick with it?
Read Answer Asked by James on March 12, 2021
Q: Friday morning 9:40am and XBC is down heavy based on pre-announcement of sales decline. XBC has been touted as one of 5i's top growth stocks. But things happen. In earlier question today you replied that you would have to do more work on this. How and when will this new information be passed along? How do you now rate the stock? Is this a one time incident that will be overcome or does this significantly change your view?
Read Answer Asked on March 12, 2021
Q: Hi, I am a holder and have had the recent pleasure of walking through the Sangoma Proxy materials and have read more about the deal with StarBlue and I'm wondering your thoughts of the transaction, specifically around the details that the StarBlue CEO will be THE major holder of Sangoma (25%). I understand that Sangoma is using their much better capital position to expand and magically double their revenue and garner much more SaaS ARR, however, it feels like the StarBlue organization was far less diligent in their balance sheet management and overall operations. Do you feel the Sangoma management will actually be able to exert their clearly quite strong operational 'chops' on StarBlue? It sort of feels like a reverse buy; As in, StarBlue convinced Sangoma to 'buy' them and thus give them capital, but the actual ownership is with StarBlue.
Read Answer Asked by Allan on March 12, 2021
Q: I would appreciate your comments of the latest acquisition, Vend.
“Vend generated revenue of approximately $34 million and GTV3 of more than $7 billion in the trailing twelve month period ending December 31st, 2020. Lightspeed will acquire Vend for total estimated consideration of approximately $350 million, satisfied by way of payment on closing of approximately $192.5 million in cash and the issuance of subordinate voting shares in the capital of Lightspeed valued at approximately $157.5 million. The deal, which is subject to customary closing conditions and post-closing working capital adjustment, is expected to close towards the end of April, subject to the receipt of applicable regulatory approvals.”
As always - many thanks.
Clayton
Read Answer Asked by Clayton on March 12, 2021
Q: One of the "highlights" from Kinaxis' recent quarter was the decline in gross profit. From what I can tell, it seems that R&D spending was significantly higher, in part to augment AI capabilities. Can you shed any light on this decrease in profit and if it was from higher R&D is that not a good use of capital and does that not bode well for the company going forward?

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on March 12, 2021
Q: Hello Peter, Ryan, and Team,

Wondering if you think it's still worth putting some money into the re-opening trade via one of the airlines. I'm considering reducing my position in REAL in order to do so. Although REAL is relatively cheap right now, its price trend is still moving lower. I know you like Southwest Airlines, but Air Canada's share price is nowhere near pre-pandemic levels, while LUV is already there. I have been reluctant to invest in the airlines, as I'm convinced that business travel will never return to the same levels. Many companies have finally realized it's often unnecessary and that cost-effective, technology-based alternatives are preferred. However, I think the pent-up leisure travel demand will likely make up for this on a short-term basis. Can I please have your thoughts?
Thank you.
Brad
Read Answer Asked by Bradley on March 12, 2021
Q: So working in the finance industry, when it comes to business valuation, I know private health clinics get very low multiples. If Well is continues to consolidate in a space where now one else is and provides technological efficiencies. Even if they are just able to capture the majority of market share in Canada, could the potential upside be the sky?
Read Answer Asked by James on March 11, 2021
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