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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 5i,

I own the Preferred shares of ECN. They have just sold a major part of the business and are going to pay a special $7.50 dividend to the common shareholders. The way I see it, are they not taking away a lot of the security of the preferred shareholders by paying such a large common share dividend? Do the preferred shareholders have a voice in this matter? Can the company just dividend out everything leaving the preferred shareholders holding a worthless piece of paper?

Your thoughts on this are appreciated.

Read Answer Asked by John on August 12, 2021
Q: A follow up question to your earlier response. If the company is paying such a high special dividend does that mean that Mr Hudson and the board did see better uses for the proceeds? After the sale the company will be much smaller, slower growing (from what I can tell but I may be wrong) and without the cash available to grow meaningfully by acquisition. Do you think this is the start of the end game for ECN where the rest of the company eventually gets sold?
Read Answer Asked by Richard on August 12, 2021
Q: I am sure you are tired of ECN questions by now, but I have to ask;)

Do you have a good way to evaluate what the leftover divisions of ECN will be worth on a per share basis?

I assume one can't simply equate the amount of revenue left over.

I am not skilled enough to figure that out, but I am sure someone is.

Is there a bit of a disconnect here or are the left over segments only worth ~$3.5 a share.

As always, thanks for the great service.

Read Answer Asked by Colin on August 12, 2021
Q: I'm thinking that I want to remain invested in ECN because I like how they think and their results. I'm thinking of buying more shares in the coming days which ended the day barely up from the day before and I expect it will not fall the full $7.50 when it goes ex-dividend which would give me the post-dividend shares at a cheaper price than buying later. I would do this in my RIF and TFSA so there is no resulting tax. What do you think of this idea?
Read Answer Asked by Earl on August 12, 2021
Q: DNTL traded over 3 3/4 million shares on Thursday. Would you like to surmise where those shares came from. My brother's dental practice was bought by DNTL a few years ago, part of the purchase prices was in shares, at a lot less than what they are at now, and they would on occasion buy them back from him at escalating prices. Could those shares sold be from this type of operation??
Read Answer Asked by Edgar on August 12, 2021
Q: Hi 5i,
I'll preface my question by saying I'm not well versed in analyzing the ins and and outs of quarterly reports and financial statements.
That said, I hope you can help me understand the great difference in the share price of LSPD and CURA, both of which i own and which I therefore want to understand better.
As i read them, the most recent quarterly reports of the two companies disclose that LSPD had revenue of 116 million to 312 million for CURA. LSPD loss per share was .38 and CURA's was .01. LSPD has 2.2 billion in total assets of which 807 million is cash and 1.266 billion is said to be made up of goodwill. CURA has 3 billion in total assets, of which 333 million is cash and 538 million is goodwill.
According to the metrics in 5i's digest for each, CURA leads in all the profitability ratios and in every management effectiveness category. Price to sales for CURA is 10.93 and price to sales for LSPD is 40.90, while CURA's price to book is marginally better than that of LSPD..
Assuming I have the foregoing stats correct or nearly so, why does LSPD trade for nearly 8 times more per share than CURA, and why is LSPD considered such a good growth prospect? While I recognize they are clearly apples and oranges, given that LSPD seems to have so far to go just to catch up to the numbers a less favored company like CURA has already reached, is it way overpriced?.
Thanks,
Peter
Read Answer Asked by Peter on August 12, 2021
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