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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: Hello,

I'm hoping you can assist me with my perceptions of the relative value one might receive if they were to invest in one or more of the Brookfield group of companies. First off I'd like to note that the statistics I am quoting for each of the firms comes from the TMX website. I note that because I'm personally never entirely confident that their statistical data is entirely accurate.

BAM.A P/E: 25.60, P/B: 1.441 Yield: 1.543%
BBU.UN P/E: 40.10 P/B: 0.918 Yield: 0.973%
BEP.UN P/E: N/A P/B: 1.335 Yield: 4.895%
BGI.UN P/E: 6.10 P/B: 0.787 Yield: 11.132%
BIP.UN P/E: 550.90 P/B: 1.744 Yield: 5.486%
BPY.UN P/E: 4.30 P/B: 0.253 Yield: 16.392%

Assuming the above values may be close to correct, doesn't that mean that someone investing a dollar in BPY.UN is purchasing units at about one quarter of their underlying value and that if the same individual were to instead buy units in BIP.UN that they would be paying $1.74 for each dollar of actual "value" they were buying?

I would appreciate it if you would please speak to my perception of what the price to book ratio implies about an investment and if you would also please rank the above noted Brookfield properties, in your order of preference, from best to worst. My target holding period is basically forever, with a desire to be able to harvest 6% or more from each of my investments, each year, going forward. Have any of the Brookfield properties ever cut their dividends in the past and if they did were there particular circumstances under which the cuts became a necessary evil?

Lastly, if there may be a website you might be able to recommend where I might be able to obtain statistical data for companies I may be considering investing in, with a high degree of confidence, that would be appreciated.

Thank you!
Read Answer Asked by Richard on April 06, 2020
Q: Greetings,

A trader(yes - not an investor) recommended a couple of option selling strategy CEFs funds that can do well in this market. i am not comfortable selling call options myself but understand how they work and wanted to get your opinion of a little bit riskier trade to supplement an otherwise med conservative investor. Looking for dividends in this low interest environment. I expect that companies will start cutting dividends here so need a replacement way to generate income in the short term only.
thanks
Read Answer Asked by kelly on April 06, 2020
Q: Can you recommend a good ETF probably US based, which has companies in the forefront of corona vaccine development/demonstration, as well as corona related testing and diagnosis.
Read Answer Asked by Vinod on April 06, 2020
Q: Any strong objections to doubling down on CHW. I have owned it for many years. It is a riskier play then buying TD but the upside on the rebound is likely bigger at current valuations. They will get hit hard by covid but my feeling is that is built into the current price. I doubt the current 20% div yield is sustainable but they should be in a position to payout something monthly for some income while folks wait for the rebound. With the +50% drop I would double down to get me to my old weighting.
Read Answer Asked by Tom on April 06, 2020
Q: I own cardinal energy a very small cap energy name. I am concerned about their debt load and possibility of not making it through the current downturn in the space. They have convertible debentures due in Dec of this year of 45 mil. Bank loan of 175 mil due Dec of 21 there is cash on the balance sheet and nearly a billion in assets. Do you feel they can get to the other side? I am bothered by the fact that management has not purchased many shares in the downturn compared to insider purchases of their peers such as wcp-t, kelt or nuvista.
Read Answer Asked by Andre on April 06, 2020
Q: I starting purchasing LSPD last August and I have continued up until late last week. My average price is close to $32.

The question that I have to myself is: Do I double down or hold - I am not interested in selling. I had a full position 30 days ago but it has been reduced by more than 50% this past 30 days.

After rereading your answers, looking at LSPD website and news feeds. I gathered and summarized the information below.

Money in bank - lots - greater than $300 million - NO Debt!
15 years of cash at current spending rate.
Large institutions bought at $37.30.
IPO $16.00

Last quarter financial information.
Revenue was a slight beat at $32.8 million.
Met ebdita projections with a loss of $5.25 million.
Book valve is $2.35.
Growth was above 60% yoy to plus $32 million.
Recurring revenue was growing at 58%.

Institutional investors have 49% of the float, with Caisse owning 37%.
They have business in more than 100 countries.
There will be less restaurants in future, maybe 20% less.
The restaurants that are remaining will be financially stronger and have less competition. They will seek out SaaS that can reduce operating expenses while increasing revenues.
Lightspeed has good management.
It is a long term hold for me - 2 to 5 years - maybe forever.
Lightspeed has less than 0.1% of market, I like growth companies.
Lightspeed retailers grew over six times faster than industry average.
Products by Lightspeed: Retail, eCommerce, OnSite, Restaurant, Delivery and Loyalty. Also Lightspeed Payments. Rolled out #lightspeedlocal

They recently bought: Gastofix (Germany), Kounta (Asia Pacific), IKentoo (Swiss) and Chronogolf (Montreal),

A few competitors through a google search, of which I don’t know whom will survive due to many reason ( like lack of money): Shopkeep, Revels, Toast POS, Touch Bistro, Sapaad, Cake, Springboard, Square, Vend, Upserve, Lavu, Clover, AccuPOS, Harbourtouch, POSguys, Touchsuite, ) these are some of the top 20.

Strengths: the bank account; they don’t have to worry about paying operating expenses for many years due to its financial strength; significantly more room to grow; Quebec pension company support and Quebec government support; their source of revenue is across the world; good management; the good management will quickly use its financial strength for growth; growth into other areas that have weak or low market share systems.

Weaknesses: their competitors may have deeper pockets and will grow more quickly dwarfing LSPD and the other competitors; no sales people; how much of their current POS businesses will not be in business in 90 days; others?

That being stated I plan on doubling down in the next 4 weeks by buying when stock in under $13.

Am I missing anything?

Clayton
Read Answer Asked by Clayton on April 06, 2020
Q: I own (for quite a while) 1500 shs of BIP.UN and it has been a big performer until the recent collapse of the market. I just checked my on-line account and noticed that I now have 166 shs of BIPC:CDN: looks like they did a restructuring whereby I was allocated these shares. What a surprise. Can you tell more: should I keep BIPC & would you add to BIP.UN or BIPC at the current price. BIPC seems to trade at the same price.
Read Answer Asked by James on April 06, 2020
Q: Hi, what theoretically could be the impact on BEP in the unlikely event the parent company BAM runs into credit/solvency issues as a result of issues arising from its own portfolio holdings or with its cyclical oriented subsidiaries.. Would BEP continue as a stand-alone utility relatively unscathed or would there be repercussions? For instance could BAM suck cash out of BEP to shore up its balance sheet in a crisis situation? I learned from the GFC to not assume anything is totally safe. Hopefully not round 2! Thanks.
Read Answer Asked by Gary on April 06, 2020
Q: Since bam is preferred over others, is now the time to start nibbling to get a 5% position or wait for things to get
a little more stable.
Read Answer Asked by Maureen on April 06, 2020
Q: Is there a "superficial gains" rule? I am asking as I am trying to determine the most effective ways to make use of capital losses. Would "washing" some existing gains in a tax year by selling and then immediately rebuying the up security be an effective way to use capital losses?
Read Answer Asked by Andrew on April 06, 2020
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