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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 Peter if the 100 million contact with the Saudi's is lost say TODAY what is the material affect to COV.? ie. 1. what would be the new revised P/E ratio? and. 2. what is your best guess as to the new lower trading price per share ? 3. does your forecast of 35 cents to 40cents per share for 2019 assume a favourable resolution of this issue? 4. what percent of equity is currently owned by executives and insiders? thanks Richard
Read Answer Asked by richard on September 19, 2018
Q: VMD is up 300% since March while of RHT drop more than 50%. They were supposed to be in the same space and RHT was supposed to be the better company. It makes lower lows every week with no end in sight. Is there any other option that will provide growth in a TFSA account.?
Read Answer Asked by Marios on September 18, 2018
Q: Currently own a 4% position of Dollarama and after the disappointment today was thinking of switching over to Covalon as a replacement. Looking out 3+ years would you look at this as a better long term strategy? Starting to worry the Dollar store space could get crowded in the coming years.
Read Answer Asked by Patrick on September 14, 2018
Q: What would you recommend doing with PLI and ITC at this stage given their performance (I'm down materially on both)? Any recommendations for replacements? Thanks.
Read Answer Asked by Mark on September 13, 2018
Q: TFI - TFSA or Unregistered account?

Bought 2.5% position in Cov on spec at $7 based on 5i's recommendation. Hold on or take the money and run?

RHT / TSGI- average down or be patient?

Thanks. Keep up the excellent work.

Best Regards,

KC


Read Answer Asked by Kelly on September 10, 2018
Q: All things being neutral, what would your expectations be for Covalon's 2018 and 2019 earnings per share? Also, can you give a brief history of their cash levels (maybe for the previous 3 or 4 quarters?)

Secondly, I know you are not fans of averaging down. However, if you WERE to average down, would you take your initial purchase price in trying to determine your percentage weighting, or would you take the current market price? Example, lets say I take a 2% position in Covalon, which theoretically I would want to be my maximum weighting. Shortly afterwards the share price falls 50% (for the sake of easy math). Would I prohibit myself in buying more Covalon because my initial purchase price represented 2% of my portfolio or would I grant myself the option of averaging down because now my weighting in Covalon represents 1% of my portfolio, assuming my portfolio value remained the same.

Thanks and good luck to the staff's kids for their new school year.

John
Read Answer Asked by john on August 31, 2018
Q: Further comment about press releases sent directly to investors from Covalon CEO Jeffrey Mandel: I own that stock. If memory serves, the stock hit a high of 9.15 on August 6 and then appears (in my naive understanding) to have become the victim of a short attack. Trading was halted and IIROC then asked the CEO what material change(s) -- if any -- might account for the abrupt drop -- which hit a low of 6.26 (nearly 40%). As an investor, I took Mandel's first direct emails (which began at that time) as reassurance to investors not to panic and dump the stock. COV has recovered somewhat since then, but I'm assuming that Mandel might be sensitive to the potential of another assault against his company (e.g., SHOP) and may want to inform investors directly of positive progress being made -- which include the last couple of messages that just arrived in my inbox.
Read Answer Asked by RANDALL on August 29, 2018
Q: Since buying COV, I've started receiving regular emails such as these 2 yesterday:
"Covalon Announces Another Milestone Quarterly Profit on Excellent Third Quarter Financial Results"

"Covalon's excellent earnings listed on Globe and Mail small cap movers list"

I have never received these types of emails on this regular of a basis from other companies that I own. Should I be concerned about the promotional nature here?
Read Answer Asked by Andrew on August 29, 2018
Q: I previously asked a question about deploying a lump sum of $100K to $200K. Can you suggest a handful of Companies that you think are the most attractive right now in terms of future growth?

Thank you,
Jason
Read Answer Asked by Jason on August 27, 2018
Q: Hello,
I would like some names to consider (2 or 3) for the healthcare sector.

I already own GUD in Canada (TFSA). This is for my RRSP so I am looking for a more conservative name.

I know you don't cover the US but would like names from the US or even international for geographic diversification. Also, for personal reasons, I do not want any drug companies (pharma or biotech).

Thanks as always for your help.
Dan
Read Answer Asked by Daniel on August 27, 2018
Q: Regarding the above companies, do you see any short term catalysts or is a modicum patience required? I know I Just answered the question.

I deployed my available cash on the dips and am hopeful of a return back to the prices before the dips.

While I know averaging down is not the smartest strategy, it was too hard to resist.

I took a chance on ATD on the dip and it went well. Now I think I am brilliant. Will one ever learn not to try and outguess the market?

Thanks for the sage advise over the last two years!

I eagerly await the new selections for the growth portfolio!

Finall, my wife has just retired and has a LIRA setup. The Company that is handling it scrapes off approximately $600 a month to administer it. She is not drawing on it until we are both retired. I would like to invest it based on the recommendations from 5i. We have a 5 year timeline until I am retired with a DB pension. Do you recommend the income portfolio, or a blend of all three folio’s, or to remain in the global balanced fund paying fees?

Beat Regards,

KC
Read Answer Asked by Kelly on August 27, 2018
Q: Hi 5i,
I know that speculating on takeovers is not something you advocate but do you think Covalon may be heading for a buyout? The recently announced licensing agreement with “a large global medical company” reminds me of the deal that Pure signed with Xylem, leading to the takeout of Pure less than a year (I think) later. It looks like a ‘test drive’ of marketing COV’s product and services suite. If the larger company becomes convinced it can sell the product, preserve the margins, and scale that across a larger market, a buyout is a likely next step, isn’t it? Plus, the described global medical company is presumably not Canada-based. For a non-Canadian acquirer, the perceived Saudi-Canada relations risk would likely be a non-issue. Thanks!
Read Answer Asked by Lance on August 24, 2018
Q: I have been seeing more questions on TH recently and see no reason not to begin a modest position but I wanted to compare it to two companies you have endorsed and which I own. Do you see more or less upside in TH vs RHT and COV? Could you rank these three according to growth potential and risk? To clarify, please rank 123 based on which have the most upside and 123 based on which are risky from least to most. Deduct credits as you see fit.

Thanks!
Read Answer Asked by Tim on August 22, 2018
Q: With regards to Covalon and their contract with Saudi Arabia. They have stated that the current diplomatic squabble does not effect their business. Are you aware of any terms of the contract and/or delivery of product or payment schedule that has or is scheduled to happen? I'm just trying to determine if despite the rhetoric it's not effecting or delaying the terms of the contract.
Read Answer Asked by Marty on August 20, 2018