Investment Q&A

Q: Of these beaten up software stocks, which 3 or 4 stocks would you choose, keeping in mind greatest return potential and not too much overlap between the picks. Thanks

Q: In their quarterly report today, which seemed very good to me, OTEX said:

OpenText is at the forefront of Enterprise Information Management for AI, and at our recent OpenText World conference, our customers and partners demonstrated on the main stage how they leverage our Aviator AI solutions to solve complex problems, bringing insights, security and compliance to their information and most sensitive data.

If this is true, and OTEX will benefit from AI, why has it dropped about 30% in the last few weeks on the AI Eats Software Companies' Lunch trade? This makes no sense to me, so I've been averaging down. The National Bank analyst, Richard Tse, reiterated his outperform rating in a post-earnings report entitled Still Like the Setup. Do you agree with Richard and I that Mr. Market is perhaps mistaken in its punishment of the stock?

Q: Over the last few years OTEX has bottomed out @ +/- $35.00 several times. Each time it has regained ground and reached the mid 50s or higher. There is currently a decent dividend of 4% so you get paid to wait. It seems to me that OTEX is a reasonable candidate for a swing trade. In the past 5i has made a few positive comments but has mostly remained unimpressed. Does OTEX have some fundamental problems and do you think the dividend is secure?

Q: Given the drop in CSU and OTEX today would you be buyers of either?

Q: On Jan 19, in a question by David, you stated that both DSG and OTEX did not have a dividend. Globe & Mail has that OTEX does have a dividend. Please advise if you need to correct your response. G&M advised "OpenText Corp. OTEX-T has named former IBM executive Ayman Antoun as chief executive, effective April 20. 2026" Is this a good move by OTEX? Does it change your impression of potential of OTEX?

Q: Can you please provide your analysis of whether AI software developments will negatively impact the businesses of OTEX and ENGH? Both companies seem solid, reasonably well-managed, and pay nice dividends to compensate for their low growth. Should I be concerned that their revenues will decline over time such that my retirement income will be in jeopardy? Should I move on to a more stable dividend payer, for example FTS, that is less likely to be hurt by AI?

Q: I am not particularly proud to acknowledge that I own the above- but I do. ENGH and OTEX are in accounts that are structured for income and some growth, while DSG is in an account that is looking for primarily growth. Canadian traded is key for all. Looking for your input on these companies and whether there are better options that I am missing.
No hurry to reply; deduct credits as necessary.
Seconding the comment today regarding your recent report. Well done and I hope that now you have it you continue to update it as companies come and go. It is a great resource.

Q: I am looking for 6 undervalued stocks in the Canadian market. What would be as your top 5 picks in order of upside potential. I am interested in some of them to have dividends.

Q: Do you have a more recent update on DOCCKS than January 2025

Q: Hi 5i team,

Do you think software can serve as a hedge against AI? If that's the case, and since they are mostly down, is it a good idea to start accumulating? Please provide some solid names in Canada (I have CSU family), the US, and internationally.

Best,
Matt

Q: I own all in small positions with goal to give some growth to a mostly dividend portfolio. With bad luck the only one I don't own is Celestica. I realize this is now the darling. Do I keep these or sell to buy Celestica? My only concern is chasing a hot stock which sometimes doesn't work out. Thank you!

Q: After a nice gain on OTEX would you see switching some or all to CSU as a good move in a non-taxable account?
Thanks.

Q: I am a dividend investor who prefers to hold fewer companies for the long term, gradually adding to the position over time in perpetuity.

5i recently sold OTEX from its Balanced Portfolio. There have been discussions about disruption from AI.

Do you think OTEX remains a viable longterm holding for a dividend investor? Can we expect to see modest continued growth and modest dividend growth - or should this position be sold due to the risks involved?

Q: It is said that AI will decrease the need for software or processes provided by software technology companies. Some fund managers have said that they have reduced their software holdings. Of the companies listed, are any more "immune" to the effects of AI?

Q: Hi there, what would be the best risk to reward AI play on the TSX? Would it be CLS? If not CLS, what name would it be? And could you maybe provide a few names that you have conviction in, in order? Thank you!

Q: I would appreciate your comments on the firing of the CEO and the board (finally?) getting involved to hopefully kickstart the company. In these situations it is usually best to hold and see what happens?

Appreciate your insight.

Paul F.

Q: Time for an OTEX update, have we finally turned a corner? How much of a risk do you think AI presents?

Q: I like OTEX as a long-term holding, but am in a loss situation; for tax reasons, it would be worthwhile to realize this loss, and rebuy the security in >30 days. In the meantime, I am thinking of investing the proceeds temporarily in CGI Group (GIBa). I note that today OTEX "popped" by ~10% because of a good earnings report. Here are my questions:
1. Is this a good time to sell OTEX (with plan to rebuy a few weeks from now) or should I wait a bit, since the stock could be in a bit of an uptrend over the next few weeks?
2. Is CGI Group a good proxy for holding the proceeds of OTEX disposition for the next several weeks (or would you suggest another proxy)?
3. In general, what do you think of these two holdings-- CGI Group and OTEX-- as long-term holds? If YOUR portfolio included both companies, would you favor one over the other (i.e., greater weighting within the portfolio), and if so which one (based on long-term prospects and current valuations)?

Ted

Q: What is your opinion on the seemingly sudden ouster/ replacement of OTEX CEO? Would you consider this a move forward or backward for the company?

Q: The market has responded favourably to yesterday's earnings. Is there much to like here? Can you comment on the prospects of this stock?