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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 Team,
I believe the short interest in Shopify is now about 4.77% of the US float. Do you have any guidance on when the short interest can become large enough that the stock could become the victim of a short attack? I also know that SHOP has a fair bit of cash on hand and no debt, which may help protect it. Any thoughts you have about how a short interest in SHOP, or more generally any company, might become debilitating for a stock's price would be appreciated.
Thank you, Michael
Read Answer Asked by Michael on May 11, 2017
Q: My portfolio is a combination of the Balanced and Growth model portfolios. I'm torn between your advice to "let winners run" and your advice on keeping sectors reasonably balanced. Tech is up and energy is down....so in theory, I should be selling some Shopify and Kinaxis and buying more Whitecap and Raging River. SHOP and KXS are not yet over 5% of my portfolio so I don't need to sell them to reduce risk. My instincts tell me to let the winners keep running until I see some life in the energy stocks, even if that means being very light in that sector. Your advice, please. Thanks!

Alan
Read Answer Asked by Alan on May 04, 2017
Q: The accelerating economic trend towards online commerce is one I feel is woefully underrepresented in my current portfolio. How would you suggest I address this today? Buy AMZN? Buy SHOP? Would half positions make sense given the strong runs these stocks have had?
Read Answer Asked by Patrick on May 04, 2017
Q: I am underweight technology and have targeted KXS as my first purchase in this sector. Can I please get your other top 3 technology picks to build a well diversified technology portfolio.

Thanks and keep up the great work!
Read Answer Asked by Scott on May 04, 2017
Q: I have half positions in CCL.B, ZCL, GSY,ECI and PHO; full positions in SIS,KXS,SHOP,PBH and GUD. Growth from 'good' companies is my only consideration and I have a 10 year timeline. These companies are part of the growth portion of a balanced portfolio.
Please provide guidance on the following 2 questions:
Could you rank my half position companies with growth potential as the sole criterion.
Is it reasonable to increase one's stake beyond a full position in any company that has excellent future prospects? If yes, please rank my full position companies based on growth potential.
Thanks for your excellent service, as always!
Read Answer Asked by Warren on April 26, 2017
Q: Hi 5i,
Just a comment: I’m not sure exactly what to conclude from CRH’s price move today. We have a one-day share price decline of over 18% on something like 6x average volume (possibly more because I don’t think my broker’s site picks up all volume), which appears to have been motivated by a rumor that an un-named hedge fund manager has circulated a negative report and short recommendation on the company. At the time of my writing, trading for Friday is closed and I still can’t find any mention of who supposedly issued this negative report and recommendation, let alone a copy (or even a second-hand description) of the report, to begin informing myself and critically evaluate. Nonetheless, based on the reported size of the individual sales, the initial appearance is that today’s sell-off was fueled significantly by retail investors, who would likely be in no better position to evaluate the situation than I am, rather than by large block sales from institutional investors. Of course with a stock like CRH having tripled fairly quickly from the $4 level, it was ripe to be sold. Anyone holding over that period could hedge out by selling half their position in the $10-$12 range, crystallizing a profit, and be left with only winnings on the table to play with. Investor sentiment may be influenced by fundamentally unrelated confidence issues, such as events and trading around HCG over the past few days, among other items. And there may be many holders of CRH who still can’t say exactly what separates it from being another PHM. But without even any allegations to look at, shareholders are exhibiting a “sell on the rumor of a rumor” mentality, and CRH is worth nearly $163,000,000 CAD less (by market cap) than it was at this time yesterday.

Meanwhile, SHOP was attacked by a negative report with a “Zacks Rank 5 – Strong Sell” rating slapped on it at the end of March, supposedly based on valuation getting too far ahead of fundamentals. Shortly thereafter the stock plunged from above $97 CAD to below $90 CAD in two days. Almost 3 weeks later, with no specific fundamental news in the interim, SHOP closed today above $103 CAD. Zacks Rank today? “3 – Hold” (https://www.zacks.com/stock/quote/SHOP ).

Yeesh!
Publish only if you want to.
Read Answer Asked by Lance on April 24, 2017
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