Investment Q&A

Q: Good morning, 5i.
I've owned ALTERRA POWER COM - AXY for several years and am currently down 75%. It's been trading at around the 30-32 cent mark for quite awhile. Is it time to move on or, since I've held it this long, should I continue to be patient and hopefully get some growth.
I don't see any questions on AXY since July 2013.
Thank you,

Q: Hi! I have a question on how to purchase low volume stocks. They often exhibit substantial differences between the Bid and Ask price. For eg, buying 1500 shares of DSG today at the market price would have given me an immediate "loss" of $210 v. the Bid price. Is there a way of avoiding this, perhaps by entering a Limit price? I'm not sure what that price should be in relation to the Bid/Ask. Comments please!

Q: Team 5i.Received IPL notice of annual meeting. They want to create new class of preferred shares class A. How will this effect the stock. Good or bad

Q: Hi to all, Is CFN and AVO still good stocks to hold. I bought CFN at $ 11.70 (2.2% 0f portfolio) and AVO at $33.35 (1.5% of portfolio??? both down about 17% in different portfolios

M

Q: Hi,would like your opinion on a Canadian real estate company or REIT that has exposure to the U.S. Market.
I would like a small dividend but also looking for growth.
Thanks for your good advise
Brad

Q: Assuming the AEM & YRI purchase of OSK goes ahead as per the current offer how do you see it playing out for AEM? To me it looks positive as I feel OSK is an excellent property. Do you feel there is a potential YRI & AEM merger on the distant horizon?
I am thinking of adding to a current small position to AEM but maybe after the deal has closed. Am I right to wait?
Thanks

Q: Crescent Point Energy is up approx $4 to $5 in the last week. I read today that they have hit a productive spot in SE Sask. Would this account for the rise or are there other factors at work in CPG? Thks in advance.
Gary

Q: Hi 5i team,
AYA has 50% Debt and 50% equity and is graded as "B" in your report card. How do you grade BEP.UN which has 100% debt? Thanks

Q: Happy Easter to you all and this is just a note to mention a site that I am finding has very good articles. It's called A Wealth of Common Sense. It has struck me a number of times that the information there could easily be written by you folks. Here's my favourite snippet from today's article, about his time on Wall Street as an analyst: "It was only buy, sell or hold, not risk, patience or time horizon." Does this not sound so familiar as I read your answers to questions on whether to buy or sell a stock? As you grow your service, and are deluged with questions, I wonder if you might give members some guidelines that you have found helpful and also list some trusted sites to assist with market education. This one would be my suggestion.
Another I like is Eddy Elfenbein's Crossing Wall Street: Eddy is the closest I have seen to what you do here. He chooses a Buy List each year, follows it and reports. There's no guff with him.
Kind regards, Gail
P.S. Only publish if you feel this has been at all helpful.

Q: For what its worth I feel the CEO of G badly bungled the OSK file. I never liked the low-ball offer - if you want it you put up the numbers to get it. A low-ball offer just invites competition. OSK, in my opinion, is an excellent miner...it's got the reserves, the grades, the location and the team that brought a gold mine into production during declining gold prices. I know you like G and I am a shareholder myself but now I am wondering about the executive suite.
I sort of recall seeing the CEO stating on television that the initial offer was a take-it-or-leave-it offer and he wasn't about to overpay. Then he increases the bid once YRI comes to the table. His word does not appear to be his bond.

Q: Good morning...

My wife has the following positions in her TFSA:

AYA 19% of portfolio
DHX 15% of portfolio
MFC 29% of portfolio
TA 25% o portfolio

She has around 13% of cash in account. Judging by other responses to questions about TA, I know you are not positive about it but she is down a little in this stock and hate to sell it for a loss. What are 3 stocks you would choose to invest in if you were her. She wants high capital gain opportunities...with a small amount of money, is it better to invest in a company with a low share price like PRW or CMI TO maximize number of shares?

Thank you for your time and your advice.

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

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.

Q: Happy Easter.AYA closed on the day's high of $6.68 up 0.87(low $5.86)on very high relative volume.The only 2 events are your report & co's announcement of sale of 1100 gaming machines.Please advise if the latter event has any material effect.Any other comments will be appreciated.Txs a lot as usual

Q: Looking at getting into TOU or WCP .WCP has a 4.8% dividend. Both have had a very good run the last three months. Is it better to wait for a sector pull back or do they still have room to run. Of the two which is the better for a two year hold.

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.

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.

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.

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

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.