Investment Q&A

Q: What is your view on Concordia health care corp? CXR on Tsx. another valiant in the making? Thx

Q: Hi Peter, As for Paul's holding of ALC.DB, I see a few more considerations for the analysis of this investment. Yield to maturity in 4 years at 2.5% assumes the debenture will be redeemed at par then, which is unlikely if the normal growth assumptions for the shares are applied and the debenture, now at a 12% premium to conversion, will be in the money, and the current $113 price will be a bargain then if the shares were to lift to, say, $24. If that is to be the route the shares will take, then conversion at a later date will be more advantageous or sale at a higher price for the converts, and a current yield of 5.3% is a fairer comparison to the share dividend of 1.8% than YTM of 2.5%. Only a flatlining or downtrend of the common would cause redemption at par in 2018.

A current 12% premium to conversion isn't large compared to lots of others including converts of FCR and MRT that I hold in RRSP where I tax shelter the interest, which is more advantageous than a taxable account. In fact I might switch for the lower conversion premium. If I'm making any false assumptions here, please correct me. Thanks, J.

Q: ALC.DB question of Apr 26/14 asked by Paul:

"Converting ...you would need to sell the debentures at the quoted price, buy the stock at the current price, pay taxes if you sold the debentures, and pay two commissions"

I don't follow the above answer. There are no commissions to convert as the broker informs the transfer agent and the shares are credited to the account. I have never seen a conversion fee at full service brokers such as McLeod.
The current yield is 5.30% (6/113) versus 1.77% for the common.
The yield to maturity losses will be gradual since the bond has 4 years to redemption. The bonds will hold up better than the common on the downside because because of embedded 4 year warrant in the bond. Conversion destroys the embedded warrant. Publish at your discretion.

Q: Does DHX own the rights to Johnny Test? This show is all my grandkids favourite. For example if they decided to start making figurines of Johnny Test and other characters would that not be a call to Disney to buy DHX for their huge potential? Or ignore if this is a ridiculous question.

Q: Espial Group (T.ESP) Q1 results on Wednesday indicate a company now hitting the sweet spot. At what market cap would you consider doing a detailed report on it?

Q: Hi team:
DND is slowly making a recovery, would you rate this as hold, buy or sell ?

thanks!
Michael

Q: Hi 5I,
I hold Methanex and I wondered if I should sell it now as the stock is going down. I thought that the increase of the price of gas might be causing the downturn? Please advise.
Than you

Q: Could you suggest a company to take advantage of the upgrading and manufacturing of rail cars that carry oil?

Q: Hello,
Could I get your opinion on questor technologies? I have a small holding that I bought at $2.18 and have seen some increase now. Do you have an opinion on whether there will be continued growth and subsequent price increase? As well I am considering buying shares in sunopta, I know they've seen a lot of growth recently, do you think there is room for continued growth for this company?
thank you for your time
dave

Q: If you were to rate VET what rating would it have.

PB

Q: You had suggested that VRX (Valeant) was likely to need new cash, which would mean a new stock issuance, dropping stock price. Given the announcement last night about Allergen, how likely is it now that VRX will need to make a large new offering?

Q: Hello 5i team,
Valeant and Pershing Square have made a hostile bid for Allergan. Both the buyer's and the seller's prices are up this morning. But isn't it as likely that Valeant/Pershing-Square will need to sweeten their offer - in which case, why is Valeant up? I had thought that, in general, acquirers' near-term valuations went down (in anticipation of the depletion of treasury and/or dilution of equity.)

Q: Thanks to the 5i team for a great service. I am considering taking a position in Algoma Central (ALC) the seldom discussed, seldom traded Great Lakes shipping company. With no coverage (that I am aware of), could you give me some thoughts on breadth of ownership (for example, are there any major shareholders or do the executive group have a good share of ownership)? I understand you met with them late last year and wonder if you sensed the possibility of future dividend increases? Thanks again and hope you can give me some of your valued insights.

Q: Hi Peter,

What is your opinion on cxi.to

Thanks
Paul

Q: Hi,

Could you please give your view on the most financial results of Questor (QST.V)? Thank you for your great work. Look forward to your reply.

Patrick

Q: SUM

Feb 14 5i suggested if it could get back to $6.75, it would be a buy.

April 2 (@ $6.72) 5i suggested wait until 2nd week April.

Today, had a slight uptick after being fairly level since beginning of the month. Should I still wait to jump in for another week or so?

thanks for all you do

Gord

Q: Hi 5i,

I've been watching GUD very patiently, looking for a good entry point to buy stock. Today, i think i found that entry point with the stock off materially thanks to the Company announcing it received a receipt from the OSC to qualify their shares.

Would you recommend buying GUD on weakness like we're seeing today? In your experience, does a stock like this continue to sell off given how in the money players must be of the last two financings? I know you like management, but would you recommend buying shares today?

Q: Knight Therapeutics announced receipts on Thursday (which I don't) understand and the price also took a dip on the same Thursday. I was hoping to soon take a position in GUD. What does the receipt announcement mean in terms i can understand and would it be better to wait to initiate a position?

Bryon in Elmira

Q: Morguard Corp (MRC) - has been on a tear this last week but the only news I can find is the luxury rental in TO. I have held this for a long time and have done well but wanted your insight as to what may be happening with this stock.

Thanks as always for your insights.

Cheers

Q: MNW Since your last comment regarding Mitel, they have posted results that apparently have disappointed the market. With the stock falling below $10, has this become a wait-and-show-me story, or is this possibly an attractive entry point, for someone with patience.
Thank you as always...