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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 I see IT has a currency hedge till March 2017 (details included)
Regardless I imagine exposure will result in a big sell off. Would you agree?
Cross Currency Swap On November 23, 2015, the Company entered into a cross currency swap agreement (the Currency Swap) in order to minimize the Companys exposure to exchange rate fluctuations between the Great British Pound (GBP) and the US Dollar (USD) as cash generated from the Companys operations is largely in GBP while principal and interest payments on the Companys Term Facility is in USD. Under the Currency Swap, 90% of the Companys USD Term Facilitys interest and principal payments will be swapped into GBP. Intertain will pay a fixed 7.81% interest in place of floating USD interest payments of Libor plus 6.5% (Libor floor of 1%). The interest and principal payments will be made at a GBP/USD FX rate of 1.5135 on USD notional amount of $293,962,500. The Currency Swap terminates on March 31, 2017.


Read Answer Asked by David on June 24, 2016
Q: Hi there, can you please comment or provide analysis on how CXR, IT, AYA and others within the portfolios would be affected due to the Brexit vote coming up soon, considering revenues from European region and due to FX? I believe Brexit vote may be causing stock price weakness for CXR, maybe? Also, would anyone want to take out CXR before the Brexit vote knowing how volatile Europe would be if England exited? Thanks!
Read Answer Asked by Hussein on June 14, 2016
Q: Hello,

Two part question. First, thoughts on NYX Gaming's earnings report? Second, Intertain just reported strongly, is considering strategic options and seems to be generally acting better. Would you switch any holdings in NYX to Intertain? Also, from a technical standpoint does Intertain appear poised for a breakout if it can ever shake free of the 12-12.30 range?

Thanks
Read Answer Asked by Tim on May 26, 2016
Q: Hello, I am a new member and have some questions. I am almost 30 years old and have a new, manageable mortgage. My TFSA stock account values at appox $20,000 with additions of $250/ month. I'm needing to build up my emergency fund and currently own 500 shares of AYA, 220 shares of IT and 200 shares of SLF. I'm hoping for some guidance. Thank you, Katherine
Read Answer Asked by Katherine on May 23, 2016
Q: Having bought some at much higher prices ($18) and given your recent comments around it's low valuation and that IT is trading at significant discount to it's peers would this be a good price to pick up some more and lower my ACB? I know if the company is sold it unlikely to be at a price that's a double from here. IT is an insignificant part of my portfolio but is in my tfsa so i can't use the loss.
Read Answer Asked by Richard on April 26, 2016
Q: In 2013-2014 you could feel the animal spirits. Many stocks where hitting new highs and smallcaps were going up. Then we got the oil crash and the party was over. But then, it got nasty: the short attacks. Some were based on little facts, but many gave us reason to second guess putting more than two paychecks on companies like AYA, AVO, WIN, PHM, VRX, IT, CRX, etc. For example, a post about Intertain and its CEO stepping down: http://calvinayre.com/2016/02/22/business/intertain-ceo-quitting-following-committee-report/. In 2014, reading your answers, I was under the impression that Intertain was a simple business, cheap and safe other than its debt. However, now I see a company that was milking shareholders with its compensation plan. Suddenly, I see a reason for the cheap valuation of this previously big performer: the management is questionable. Question 1: Are you surprised by the number of companies with 'question marks' and those where the management negatively surprised us, relative to previous years in your career? Is the lack of growth tempting management teams to do illegal/riskier/unfriendly moves? Question 2: Are you surprised by how much stocks pullback these days, such as the 40% pullback of IT and ESL?
Read Answer Asked by Matt on April 04, 2016
Q: Hi Team,
I see the independent review in response to the short report is out. Do you have any concerns especially with the following?

Corporate Processes and Controls

The Committee and its advisors also considered the performance of Intertain's corporate processes and controls and the financial and governance functions and oversight at Intertain. The Committee has made recommendations for changes and improvements in these areas, including to address inadequate documentation, approvals and record keeping in respect of certain payments previously made by Intertain that were recorded and fully expensed by it as transaction expenses in connection with its prior acquisitions.

Thank you, Michael
Read Answer Asked by Michael on February 08, 2016
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