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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: SW... Sierra Wireless

For 5i & Family... with a question at the end...

SW has had very good "recent" financial Performance and 2014 Q1 will be reported May 1. Cisco believes the M2M market will be worth (get this) $19 Trillion by 2020. SW has made some very good acquisitions as of late and last reported EBITDA grew 48% to $18+ mm.

They have developed a number of new (and unique) products including AirVantage which is a cloud service enabling OEM's to run their applications directly on the module reducing overall time and cost significantly. And they have released the world's first 4G embedded module designed specifically for the automotive industry. In addition, they have recently introduced ES440 designed specifically for Branch Office Continuity.

Balance sheet looks strong with lots of cash, $18 mm in operating cash flow and stock is reported as relatively cheap at a trailing P/E of less than 12 despite a stock increase of 90% in the past year.

As I reported earlier this year, I went by and visited the Head Office and saw a very busy environment with people running all over the place, and lots of suppliers/customers in the lobby. SW has significant Blue Chip customers and has landed many new customer design wins.

I am wondering why I shouldn't be investing a 5% position is SW? Is this all too good to be true? Am I dreaming if I think I am looking at a $100 stock in 2 years or less?

Really look forward to hearing your thoughts

Thanks Peter & Company

Gord
Read Answer Asked by Gord on April 20, 2014
Q: Your answer to Jeff's question about AYA's 5 year earnings growth. The CAGR IS -253%. The math proceeds as follows: -253% turns plus 4 cents into -6 cents after 1 year, into -9 cents after two years, -14, -22 and finally -33 cents after 5 years. If you change to a simple average (presumably over 5 years) you'd show -7.4 cents as the annual level change needed to turn plus 4 cents into -33 cents over 5 years. In simple interest terms that's -285% and not much easier to grasp. Keeping the CAGR (which works well in the vast majority of cases) and showing the 5 annual earnings in the body of the report would illustrate how plus 4 cents developed into -33. Publish this if you think it's worth doing so.
Read Answer Asked by Fraser on April 20, 2014
Q: How will the yet again delay of the keystone pipeline project impact the oil and gas/ stocks. Is this good for the rail stocks and Stella jones SJ.? And how bad for the oil and gas stocks.
Read Answer Asked by Helen on April 20, 2014
Q: ANY In the past you seem to have viewed this company in a positive light - albeit with qualifications regarding not knowing management well and this being a high risk investment. Given the scathing article in Seeking Alpha this week and the subsequent volatility how does this affect your opinion?
Do you know if the author is a credible source? Would you buy this stock? Or sell it if you owned it?
Thanks for your help.
Happy Easter.
Read Answer Asked by Donald on April 20, 2014
Q: Hello 5i Team
I would appreciate knowing if holders of the Baytex Recipts BTE.R when converted to BTE at the end of June 2014 will receive dividends back to when the receipts were paid for or will the holders only start receiving monthly dividends when the conversion take place? Thanks for the excellent reporting you are doing.
Read Answer Asked by John on April 20, 2014
Q: Knight Therapeutics announced receipts on Thursday (which I don't) understand and the price also took a dip on the same Thursday. I was hoping to soon take a position in GUD. What does the receipt announcement mean in terms i can understand and would it be better to wait to initiate a position?

Bryon in Elmira
Read Answer Asked by Bryon on April 20, 2014
Q: Based on the April 17 market action it seems market players are tuned in to 5i's report on Amaya, AYA, issued the same day as a big pop. Just kidding, but what it does illustrate is how volatility can be a friend as well as a foe. Bear in mind, to add to John's recent wisdoms on this stock, that without volatility, the two sided coin, you wouldn't make any money in the market, so you might as well buy a GIC if you can't embrace this concept. Also, most stocks present buying opportunities when the faint of heart swoon. I can provide lots of recent B.O. examples with 5i portfolio stocks, too.

I love the new report card. At a glance I can see where a company's strengths and weaknesses are, and in Amaya's case it seems they need to buckle down and earn some dough. I get the D minus rating on 5 year EPS growth but I have trouble getting my head around minus 253% which I believe is an annualized return over the 5 years. My knowledge of accounting isn't very extensive but I believed that minus 100% was about as bad as it could get, and if you're going to break it down over 5 years you get something like minus 20% annually, less if compounded. So is this a typo or am I out to lunch? Also TD has current ROE as minus 13% so over the 5 years was this a positive figure that has shifted to the negative and is the trend down? Thanks, J.
Read Answer Asked by Jeff on April 18, 2014
Q: I have a position in CFN but I am currently under water and it continues to slide. Would you recommend cutting my losses and moving on or keep holding ?
Read Answer Asked by Ken on April 17, 2014
Q: This is in response to Ronald's question re: an earnings calendar source. Both Scotia iTrade and TD Waterhouse (I'm sure others offer them as well) have a research/quotes tab within the account. Click the tab and a calendar with expected earnings releases, dividend issues, stock splits etc. will come up.
Read Answer Asked by Simon on April 17, 2014
Q: I keep a hefty chunk of cash in my online account but the Broker pays no interest!! What in your view would be the best way to get interest on it and yet have it easily available for stock purchases at the appropriate time?
Read Answer Asked by roger on April 17, 2014
Q: Hello All,

I am confused by the. Continued weakness of Argonaut Gold (AR) and was attempting to understand the relative valuation. How does AR compare to a company like BTO? Are the relatively the same size companies? Do they 'deserve' to have comparable share prices? Would it be fair to expect AR to fall to the $3.00 range? Finally, which company would you consider to be a stronger buy and hold prospect?

Thank you for your help!

DON
Read Answer Asked by Donald on April 17, 2014
Q: Hi , Ceres Global AG corp will have their Northgate Hub operational this summer does it change your previous views on them?
What effect might bill c-30 have on CRP's new hub?
Thanks
David
Read Answer Asked by David on April 17, 2014
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