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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: re: TD, MFC Interest rates plus Amazon & VISA missing forcast

the market in general after the Amazon/VISA reports became public have fallen yet both financials TD & MFC saw nice gains.

What is your take on this and does this in any way indicate what might happen with interest rates?

Thanks for all you do

Gord
Read Answer Asked by Gord on July 26, 2014
Q: Hi 5i: Previous governance issues aside, it seems to me that Enercare’s management is looking like a combination of clever and lucky. Presumably they were working on the details of the announced business acquisition from Direct Energy for the past few months, while watching the ECI share price working its way above the $12 level. They get to a deal they like the look of: immediately accretive to earnings and growing the business in a reasonably logical way. While all that is going on they get an overture from TSSP with a low-end valuation of $13.50 and when that news is released their currency for the Direct Energy business purchase (i.e. their share price) jumps up above 13.50 and they immediately sell out a $310mm financing at $13 per share to fund it. Now that Direct Energy deal is looking just that much more affordable and hence that much better; they have a bunch of new shareholders in at $13 and expecting a profit from that level; and they just made ECI into an even more valuable entity to sell to TSSP or whoever else may be interested. Initially they had responded to TSSP by saying we aren’t even interested in talking to you at $15 per share (which appears to have been a number TSSP put into the conversation). So where does it go from here? Would you consider it to be a good idea to add to a partial position (about 3%) at the current market price? To balance out my little sketch, can you please highlight the main risks for investors? Thanks!
Read Answer Asked by Lance on July 26, 2014
Q: Intel (INTC) has been performing really well recently, and I'm worried it's reached a high and might be worth selling, despite recent good news. It's about 3% of my overall portfolio, which has an already small amount of technology exposure. Specifically, what sort of upside do you think remains with INTC in the next 12 months?
Read Answer Asked by Cameron on July 26, 2014
Q: Hi team, would this be a good time to "double up" on OTC Open Text. The stock seems very cheap right now with quarterly numbers soon coming out. I have a full position right now in the stock with a well diversified 20 name portfolio. I'll be adding to the other existing names after in the near future and my risk tolerance is good when being overweight in good quality companies. I did this last year in CSU Constellation and it worked out great.
Read Answer Asked by SHANE on July 26, 2014
Q: re: CBI Chicago Bridge & Iron

Recently started watching CBI looking for value after it was highlighted on Market Call as a Top Pick and the very significant drop back in 2nd week June.

And since the 5i team last took a look on June 13, the price is down a further 15% with a majority of that being attributed to a 9% drop in today's trading alone.

Do you have any explanation for the falling value and, do you see any value in CBI based on it's current metrics?

Thanks for all you do

Gord
Read Answer Asked by Gord on July 25, 2014
Q: Please comment on the recent offer by Long Run to acquire Crocotta Energy at .415 shares of Long
run ($2.30). There is a further spin-off offer of ExploreCo ($1.70). I have been contacted by Crocotta and need your expert advice if I should vote for this. It appears that ExploreCo may be a very valuable and gas producing property.
Thank You Once Again!
Read Answer Asked by gord on July 25, 2014
Q: Dhx has received approval from the Crtc. Have they got the cash to buy the family channel or do you foresee another financing?
Read Answer Asked by Helen on July 25, 2014
Q: I awoke this morning to find our CSS was being sold. I jumped on line to see the increase in share price. Wow talk about lunch bag let down 5% premium on the recent share price seems extremely light. Like other 5i members I am concerned. ps who cares about a 52 weeks avg share price. It seems the executive of CSS have sold out and abandoned the shareholders. Listening on line to the Transforce call they seem very happy with the deal of course. The commentators on BNN were positive from a Transforce perspective. Where is the voice of the CSS shareholders? Sorry for the rant, am I off base? Is there a trend for light buy out prices the BA price seemed a little light and CSS's price seems very light. Is this because there is not enough competition in Canada for these companies. mike
Read Answer Asked by Mike on July 25, 2014
Q: I sure appreciate having someone who I can consult about the financial market. People I deal with would not have the answers. I am asking about a few stocks but most of these are on my 5i watch list because they come up on the question and answer list regularly. Since there are a few of them I do not expect you to spend a lot of time on each question. They are:
CEB (Ceiba) - had a big drop today; SVC (Sandvine); CF (Canaccord); TC (Tucows); CXR (Concordia); DHX (DHX Media); and CWL (Cladwell) - If you could rate them in order.
Thanks
Dennis
Read Answer Asked by Dennis on July 25, 2014
Q: Could you comment on Premium Brands(PBH) for income, with respect to payout percentage, dividend stability and debt levels? I am looking at about a 2% position and currently hold nothing similar.

Thank-you
Read Answer Asked by grant on July 25, 2014
Q: Good morning 5i team,
Re: DHX In response to Rod L.'s question of July 23, the following NR came out at the end of the day, yesterday.

DHX Media receives CRTC approval on $170M acquisition of Family Channel and three other children's channels.
24 Jul 2014 - ACQUIREMEDIA
Read Answer Asked by Kathy on July 25, 2014
Q: Hi,Peter

Could you please comment on NFLX.US and Qcom.us earnings,
Is it a long term hold? Thanks.
Selina
Read Answer Asked by selina on July 25, 2014
Q: Hi Peter and Team,

Please speculate as to why Amazon's stock price is so erratic after hours. I am aware of their negative quarterly results but why the bounce back then???
Read Answer Asked by Peter on July 25, 2014
Q: What are you thoughts on Atrium Mortgage earnings.
Read Answer Asked by Tom on July 25, 2014
Q: A broker research report on IPL states that "Our target price ($30) is predicated 75% and 25% on our 2015 and 2016 financial estimates,respectively, as follows: 1) 25% EV/EBITDA multiple of 15.5x, 2) 25% relative dividend yield of
175%, and 3) 50% free cash flow yield of 6.5%. Our target price also incorporates a 2.50% 10-year
Government of Canada bond-yield assumption."

They give IPL (our 8th largest holding) a forward PE of 28X and the others we hold in the Pipeline Sector at lesser weights than IPL - for ENB 23X and ALA 25X though the target prices for the other 2 are positive. We all know that brokers' research reports are intended to get clients to trade but I wonder if I should at least reduce IPL holdings to boost the other 2 especially as the PE numbers are quite rich?

Also do you agree with the research numbers and do you perhaps feel that the sector as a whole is pricey? Thanks, J.
Read Answer Asked by Jeff on July 25, 2014
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