Investment Q&A

Q: With the world feeling a little uneasy about a pending recession, I want to keep only holdings that will weather a downturn. I'm not trying to time the market, and want to hold stocks, that while they may dip, have good balance sheets, good management, and will likely see a recovery. Others I will sell and hold the cash. Above are my current holdings. Do you see any that may be susceptible to excessive weakness in a recession and would therefore meet my sell criterion? Thanks,
Kim

Q: You guys seem down on COV.
They had said that the $100M Saudi contract would be in the second half of the year and now they said it is delayed a quarter. As a result, they needed money and did a private placement at a low price which is a misstep.
It is not unusual to have a delay with a contract.
If the contract comes to fruition, is there any doubt that COV will not get to new highs or am I missing something bigger?
Also is there still a doubt that the $100M is in jeopardy because of the former employees actions?
Thanks

Q: At current levels which should we sell/keep ? They now total ~35% of overall equity holdings, and ~20% vs overall holdings inc cash. Thanks.

Q: Down significantly on these 3 in my tfsa, considering consolidating into 1. If possible a remark on what will be required and the odds of them returning to previous highs. For fun a guess as to the winner a year from now?

Q: Two questions:
1) Of the two, which one would you be more optimistic about for the medium term (3-5 yrs).
2) Which would you prefer to sell for a tax loss. (and not repurchase)

And a third question...
Regarding TSGI, the last report (06/18)had upgraded the rating to an A-. It has been a while...is it safe to assume that an updated report would see a downgrade?

Thanks.

Q: would you buy a partial position today?

Q: I looked at Morningside Quant Reports Thompson Reuters Reports and other stats on the above stocks and found the following:
TSGI. 16% Discount Undervalued. PEG .47 Moderate Buy/Buy ratings from 6 analysts

NFI. 26% Discount Undervalued 9X P/E Moderate Buy/Buy Rating 6.2% Yield , 4 analysts

COV. 47% Discount Undervalued. 0 analysts

MX. Significantly Undervalued 7.5 P/E., PEG .11 Moderate Buy/ Hold Rating, 4.34% Yield, 9 Analysts.

SU. 21% Discount, Significantly Undervalued 10.5 P/E, 7.24 PEG, Moderate Buy/Buy Rating 4.44% Yield 15 Analysts

PHO. 35% Discount, Undervalued. 15.2 P/E, Strong Buy/Buy Rating, 3 analysts.

What value do you place on Quantitative Reports as compared to other analyses? How useful are they? Are the above stocks overdone on the downside primarily due to recent global markets uncertainty or because of their own performance. The above stocks seem to have been severely re-evaluated. The idea of exiting a falling position is to eventually replace it with a position with better upside and less risk which seems to be the challenging bit. Your comments and opinions please.

Clarence

Q: I read with great concern in this weekend's National Post, David Rosenberg's article entitled "10 Reasons to take risk off the table right now". He makes ten legitimate reasons to do so. I would appreciate 5I's opinion of the article and his supporting logic. My high risk equities are WEF, NFI, TSGI, MX, COV and VET.
Carl.

Q: This financing news really rubs me the wrong way. The issue price is deeply discounted and the units come with a warrant that is also really cheep assuming the company has any type of decent future. The insiders are participating. This looks like the insiders are taking advantage of the weak current share price to stuff their own pockets and the pockets of their buddies with cheep shares and warrants at the expense of longer term shareholders.

Q: COV has a history of private placements, this includes in 2013, 2017, and now. And insiders can buy provided the Venture exchange provides waivers, including fair value. With 22M common shares outstanding, the just announced offering waters down current shareholders by 10% and if the warrants are exericed, another 10%. WOW, management friendly or what?! Has management stated the use of these funds? And is management attempted to put a floor to the current decline? And as for the warrant exercise price, about 17.5 % higher the offer price, and over 5 years, is management saying the COV price will be range bound for years to come?.......oh, so many un-answered question......wish they would sit down with me for a java talk and provide direct responses!
......bewildering, eh?!.......Tom

Q: Hi 5i,

I hold both NFI and COV in a cash account. I am looking at purchasing both at 2% position in my TFSA and then selling them both for a tax loss. Your opinion?

Bonus question-based on the ruffled feathers, would you consider doing a review of the various portfolios performance with commentary at set periods?

Thx

Q: Regarding COV. I don't usually play with this stuff and I'd only be thinking about a 1% or so position. But there seems to be an actual business underneath this mess. So lets assume the Saudi business is gone and the rogue salesman pulled off whatever he was trying to pull off. As I read their reports that leaves 60% of their business in the US. So the question is where does that leave us going forward ? And how to assess managements ability to grow from there ? If it drops to the $2.00 range is there some value there ?

Q: Can you comment on COV's announcement to raise funds and what it means for company and shareholders. I have a very small position and based on your recent assessments, have stuck with this one. Are you still going to stick with the company or is it time to bail.

Q: 5i has recommended all companies listed above. Many of your members have expressed concern over each of these companies. As soon as the onslaught begins you have defended all of them. COV is the latest stock - I don't understand your position. You appear to be growth and momentum oriented and get in well after the easy money has been made. You tend to want to stay in all sectors regardless of the climate. Why are we in Canadian health care? GUD is nightmare, RHT was a pump and dump and now COV. These are trades not investments. I have 25 Canadian stocks 10 of which are 5i all double digit losses wiping out any gains on the remaining stocks most of which are not 5i selections. Please remind us what is 5i again and why are we here?

Q: Covalon has been beaten down considerably in last few months and I see from a few of the questions that 5i has been beaten up a bit over past recommendations on it. I think many investors are similar to myself in that when a trade works out well it is because I am very smart and when it doesn't work out well it is because someone else is not :-). However looking at Covalon it still seems like there is a good path forward for them but will take longer than originally anticipated. At today's depressed pricing would you consider them a good option from a longer term perspective?

Q: I have to express my concern regarding your response to Dave re: COV on 7/29. The comment that you take a "Portfolio Approach" and 5I "will not enter into debates on individual stocks" is the issue. My concern here is that I do not buy ALL of the stocks in a particular portfolio but do own many of them. By the sheer presence of a stock in a 5I portfolio suggests to me that you approve of the stock and are recommending it. I have held onto stocks far too long because it was retained in the portfolio. I consider if a stock remains in one of your portfolios it is a "Hold" recommendation from 5I. Am I wrong?

Carl



Carl

Q:
about a year ago peter was on bnn and had covalon as a top pick, the next week the awful crista freeland had her saudi arabia tweet and covalon has been going downhill ever since culminating in last weeks disaster..i was a huge shareholder , but that week of freeland i sold every share i had never to return.
a lot of members who are afraid to lose one dollar have held on ever since ,and you seem to enable them by all the questions on covalon.
my question is why do you persist with covalon holding it in the growth portfolio as well,there is absolutely no reason to be there and you do this with a few others as well, the stars group comes to mine. i do not get it.
dave

Q: Comments on the latest update by Covalon. It has a slight whiff of the troubles that rht went through.

Q: Hi,

With COV down 20% right now would you add to an existing position. What would be your maximum weight you'd recommend in a balanced portfolio considering the risk ? Thanks

Q: I've 1% portfolio of COV, now down 50%. Would you advise adding another 1%? Thank you. Fooklin