Investment Q&A

Q: Hi there I own ABBV thinking of selling and switching to MERCK for a bit more growth and dividend yield of each is comparable. What do you think?

Thanks!

Q: Good morning 5i,

I’ve been reading up on the Telesat/MDA story and find it fascinating. I wonder if it could also be lucrative for a small investor such as myself?

From reviewing the financials (to the limited extent I understand those documents) and other materials relating to MDA, my impression is that it presents a real investment opportunity. It does real business and it appears from its recent contracts that its revenues over the next few years could rise significantly. At its current revenue base it appears its debt is well covered and its balance sheet looks healthy.

Telesat, to me, is less clear. It seems the recent announcement that MDA will build the satellites for the Telesat Lightspeed project at significant savings to the previous plan is propelling the recent steep increase in share price. But beyond that euphoria, is the company on solid footing?

The MD&A of March 2023 states:
“After decades of developing and successfully operating our geosynchronous orbit-based satellite services business, we are now poised to revolutionize the provision of global broadband connectivity by developing what we believe will be the one of world’s most advanced constellations of LEO satellites and integrated terrestrial infrastructure, Telesat Lightspeed.
Leading into 2023, we remain focused on increasing the utilization of our existing satellites, the development of our global Telesat Lightspeed constellation, and identifying and pursuing opportunities to invest in expansion satellite capacity all while maintaining our operating discipline.”

Nowhere though have I been able to find any prediction of the revenue that will accrue to Telesat from deployment of the Telesat Lightspeed constellation. A service I subscribe to notes that future earnings can’t be reliably calculated by extrapolating past data or using analyst projections (there aren’t any) and it doesn’t look like management has offered anything either. Who are Telesat’s customers and what are they going to pay for getting aboard the Lightspeed train?”

Telesat’s balance sheet appears highly leveraged and its debt isn’t well covered by operating cash flow. If Telesat Lightspeed is a truly transformational project I’d have expected to see something, somewhere, discussing the money it will make for Telesat and how it will reduce the debt and increase shareholder value, but as far as I can tell – nothing but crickets.

I would greatly appreciate your advice regarding MDA – are there risks/concerns that I might be overlooking?

Regarding Telesat, do you know of any revenue projections that I’ve overlooked and, if not, is it odd none are being made? Also, any other comment you have regarding Telesat would be appreciated. Is something really big about to happen here? It seems the process should be far enough along, given that billions of dollars have been committed by lenders, governments and the company itself, to answer that question. But maybe not, and maybe it's all still highly speculative ...?

Thanks, 5i, and please deduct as you see fit.
Peter

Q: Hello, Based on 0.33 CSU.RT, purchase and cost of 3.03 rights being 0.33x3.03= $0.99. We can acquire new CSU debentures at a total cost of $133+0.99=$134 appx ( FV $100 and Debentures with no right with management to redeem ). Does it sound accurate ?

Questions:

1. CSU debentures ( existing ) are currently trading at $137. What do you expect the trading range of New Debentures, which will be listed after Oct 6 ? My assumption is that new debentures could trade at a higher price than $137, due to No Management redemption right ( All other terms, interest etc being identical to present debentures ).

2. These debentures will pay interest based on 6.5% + 0r - Rate of change of CPI, over preceding 12 months, as at Mar 31, each year. Looking at the present and projected inflation scenario, if the rate of increase of CPI, declines over time, compared to current high rate, the annual interest rate for debentures could see a decline. Would this not cause the Debenture ( like other Bonds ) market value/price to decline ?

Please correct these assumptions and provide your thoughts. Thank You

Q: ENB’s large acquisition and stock issue with the resulting (short term) price hit looks like a buying opportunity to me. Thinking of exiting out of AQN as it looks like it’s going nowhere and buying more ENB. Good idea?

Q: good day to you all
what 's your opinion on this Co.
it seems it s not going anywhere
thanks in advance
Georges

Q: Just read an article in the Financial Post recommending these high yielding etfs.It seems to me to be extremely bad advice for your average investor.Your thoughts??

Q: Is this ETF too volatile and risky for a conservative investor? Terrific yield.

Q: A question about this savings product came up the other day. When I search, it shows as trading on "CHI"; what is that exchange? Is the fund itself CDIC insured and if not, are its holdings? Will the yield fluctuate every month? Any other info you can provide will be appreciated. Thanks

Q: Weed and CGC just jumped 30% in the past day based on the US reclassifying cannabis from schedule 1 to schedule 3. At around $1 per share it still looks like a deal compared to previous highs. What do you think of the longer term outlook?

Q: Could you please explain the difference between these two stocks that trade in the US. If interested in owning the company, which is the preferred vehicle for a Canadian investor?

LVMUY - Lvmh Moet Henn ADR

LVMHF - Lvmh Moet Henn L Vut ADR

I'd also appreciate any insight you may have into the trigger(s) for the sharp declines in both of these in recent days. Thanks very much.

Q: Hi 5i,
On June 29 you were asked for the best metrics to evaluate a royalty company like DHT.UN and your answer was:

We think the best metrics are distribution as a percentage of free cash flow (targeted between 30 and 35% as per management), new royalty transactions or pipeline, and EBITDA and FCF multiples.

Could you please supply the current numbers and information to fill in those metrics for DHT.UN, along with your commentary about what they lead you to conclude about the current health and future prospects of DHT.UN.

Thanks 5i,
Peter

Q: Hi Peter & Ryan...May I have your thoughts on Schneider Electric? Are they well positioned to win loads of projects assisting homeowners to generate electricity? Is their valuation reasonable and are they on the growth side or more like a utility dividend stock?

I understand the logic of mining uranium to fuel nuclear reactors and CCO has done pretty darn well this year. I think they have doubled from the $40 stock price recommendation earlier this year. But reactors have long lead times, are expensive and come with their own set of problems (nuclear waste). CCO's valuation is pretty expensive too.

Cities are the demand load for electricity and locally produced supply from roof top solar panels should help fill the gap. At least the transmission losses will be minimized!

Is Schneider Electric part of any "Green" ETF?

Any comments you have would be appreciated.
Jim

Q: Can you provide an updated view on Splunk post it’s recent earnings report

Q: Could you comment as to who is the owner of the Coastal Gaslink Pipeline and which companies should benefit the most when the pipeline is complete. Also which company owns the LNG terminal that will ship the liquified gas to offshore destinations. When is the projected date of the first shipment from the LNG terminal. Thanks

Q: Currently not invested in this sector. Considering starting a position in this company. Appreciate your insights.
Thank you

Q: Everyone, what would be an average annual growth rate over a 5 and 10 year period for a US growth portfolio? What would you do to increase those growth rates? Clayton

Q: Hi,

The last question on Worthington was 2017 - can I get your updated view on it?

I understand it is spinning off its steel division to focus on the less volatile consumer products division. They apparently have a very good relationship with Home Depot for their propane tanks, etc.

It’s small but is there an interesting opportunity there?

Thank you,

Q: Your znalysis of APLS.US would be greatly appreciated.

Thanks

Thomas

Q: Happy Labour Day 5iTeam,

I would like to get exposure to copper and wonder if you have to choose between these 2 companies, which one would you pick and rationales for your choice.

Cheers,
H

Q: In terms of safety and long term income in a fairly well diversified portfolio which of the 2 qualify I am 80.
Thanks
Dan