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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: Good morning.

I'm not a fan of short sellers but, with EIF, they may have a point on the cash flow. Looking back at the last 5 years (Morningstar.ca), it does seem that they are consistently showing negative free cash flow and this seems to be primarily due to investing in PP&E rather than acquisitions. If it was for acquisitions, I would view it more positively but for PP&E, every year, not so much. What is your opinion?
Read Answer Asked by Peter on July 24, 2017
Q: More of a comment than a question.
I sold half of my EIF holdings several years ago when there was a similar short attack which proved to be unfounded and also demonstrated that EIF management is actually very capable. The stock more than doubled after that, but is tumbling again not because it is a badly-run company but because it is small enough to be vulnerable to a short. I've come to the conclusion that these short attacks set up an irresistable negative psychology and a well-funded and clever shorter is probably unstoppable at least in the near to medium term. As a general rule it seems to me better to sell very early in this situation. Appreciate your thoughts
Read Answer Asked by richard on July 24, 2017
Q: Hello , back to the old short debacle. In the previous convo you mentioned DH had been taken over. I would go so far to say that the large hedge funds : drive prices down to take over or a take a large position in otherwise good Canadian companies; or, create unusual volatility so their trading arms can use trading algorithms to profit from this by playing both sides of the trade. Sad, like the Donald. Haha

Read Answer Asked by Alan on July 24, 2017
Q: Hi 5i,
I don’t think you have ever been asked about this one and it isn’t a name that comes up every day in the media but how do you think Markel Corp (MKL) looks right now? Aside from it being beaten down like everything else in the financial crisis, a very long term chart shows it to have been a remarkably good buy & hold stock up to this point. Thanks!
Read Answer Asked by Lance on July 24, 2017
Q: Hi team, bought and sold United Rentals in the past (2013)
Thinking of getting back in for the infrastructure play in the US. The latest results look good. Is the stock expensive? Would HD be a better choice after the recent drop? Many Thanks!Sam
Read Answer Asked by sam on July 21, 2017
Q: Greetings guys.

Question: If you had to split a 5% position among the names above, using strength of balance sheet, dividend growth, eps growth and valuation as determining factors, which name or names would you select and what percentage would you allocate to them.

Do you think the utility / alternative energy sector is a decent place to invest in against the backdrop of a rising rate environment. Theoretically, what weighting in a portfolio would you make this sector.

Thanks.

John
Read Answer Asked by john on July 21, 2017
Q: I am interested in Village Farms to diversify my holdings in the marijuana sector and it seems like a safer play, currently I just hold ICC for a speculative play on South America.
What are the key metrics on VFF, earnings, book value, P/E etc… and would you consider this a good entry point now that it has come off its recent high after the Emerald Health joint venture announcement?
Read Answer Asked by Craig on July 21, 2017
Q: Hello 5I, Am I right to assume that min rate-resets less vulnerable to future rate increases as regular ones? I am looking at ENC.pr.c, pays min 6.25 divs. redeemable at $25.00, trading at $23.45, new issue was underwritten by TD-BMO and RBC how safe is it, can they stop paying this div? I would appreciate your advise, perhaps suggesting a couple others.
Many thanks, J.A.P., Burlington
Read Answer Asked by Joseph on July 21, 2017
Q: I have been reading the recent news on Patriot One Technologies. Their technology identifies concealed weapons without the person's knowledge. If their technology is as good as it would appear to be, than PAT's revenue will explode in the coming years.

The current market valuation is more or less ¬$50,000,000, my best guess is PAT's income for the next twelve months will be in the $12,000,000 to $15,000,000. I am unable to predict how profitable the company will be, but their product sells for $10,000 plus PAT will receive some recurring revenues. I am guessing that most of the development and research costs are behind them, and that the cost of manufacturing their product will be less than $10,000. My question is, is there a method one can use in order to figure out if the current valuation is reasonable or not ?
Read Answer Asked by Gilles on July 21, 2017
Q: Hi there,

I am in a losing position with Cardinal on what is a small level of energy exposure in my portfolio. Do you think the dividend is safe or ripe for a cut? Also, the name has fallen considerably more than RRX, WCP etc. I understand that they have more heavy oil production which may weigh on the stock. If I wished to maintain energy exposure would you suggest switching to a different producer? If so, who? I also own Spartan.
Read Answer Asked by Tim on July 21, 2017
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