Investment Q&A

Q: In your answer to Kim yesterday, you indicated that there had been no news to explain the decline in DRX. However, after reaching a multi-year high on June 11, there was a trading halt on June 13 to announce the purchase and cancellation of almost 2.8 million shares from an insider family at $3 below market value. The shares have been on the decline since this announcement. Is it possible this large insider sale is being considered as a lack of confidence in the stock or an indication that the stock has perhaps maxed out in the short term?

Q: I have a large (15-20%) holding in CSU, as it has grown really well. They say to keep running with your winners; as I continue investing, would it be better to continue slowly adding to my CSU position, or to work on diversifying my portfolio? If diversify, I am obviously looking for other stocks that will compound at a high level over the long term. At today's valuations, in which order would 5i recommend buying these other stocks? Similarly, to diversify, does it make sense to sell some CSU to reinvest in any of these other stocks? Thank you so much!

Q: What is the problem with DRX?.This is now down 25% plus from earnings?

Q: I have narrowed down 4 choices of Industrials to add to my portfolio: DRX, HMM.A, HPS.A and BYD. The reason is they are all currently under valued compared to fair value according to Morningstar.
Please rate these 4 in descending order of confidence. Preference is growth in the next 3-5 years. And also please include suggested entry price. Thank you very much.

Q: Hi, The recent sale of 3 million shares by the owners' family members at $17.31 appears to have placed a near term top on the stock, which continues to trade well below this level and 20% down from their recent high of $20.80. Do you believe this to be the primary reason for its weakness and loss of momentum ? What should investors expect from the company in order for stock to break out of this impasse ?

Do you still see stock reaching $20-$25 level in 12-18 months ?

Thank You

Q: What are 5-6 stocks 5i would pick that are Canadian, profitable, and less than $1 billion market cap for the higher risk/growth part of a portfolio, to hold for the long term?

Q: Do you thing Small/Mid cap companies will do well in next 2 to 3 years?

What are your top 5 Canadian and US names in this space that you would buy today?

Thanks
Tim

Q: If you were looking for best overall return, how would you rank the following equities for the next two years: BEI.UN, DIV, DRX, GIB.A, HME, HMM.A, NVA. What would you suggest purchasing each at? How would you rank them for risk?

Q: Hi, All above stocks have been beaten down over past few weeks, after a strong run. They are now trading at much lower valuations compared to their larger industry peers in Canada and US. Power Infrastructure, Construction, Industrial and Banking sector have been in a steady uptrend for most of this year and growth is expected to be solid in the foreseeable future.

Just wondering, if they are simply following the trend in US markets where small caps continue to lag the market. What are your thoughts and do you see the trend reversing anytime soon ?

On a different note, ADF Group stock is now trading below $17.31 ( price at which the owners sold some shares recently } and Terravest trading below the recent secondary at $74.25. Some investors seem to be freaking out ?

Thank You

Q: Canadian Investment Regulatory Organization Trading Halt - DRX 06/13/2024

Can you explain this?

Thank you.

Q: The super brief flurry of interest in ADF seems over.Short of major material contract announcements;is there any reason to hold this name until next earnings?

Q: Hello 5i,

We have a small position of ACLS to sell and add to VRT or SMCI, or open a new position of DRX.

Which stock has your highest conviction today?

Thank you
D&J

Q: Hi, currently holding CSU 5.17%, LMN 4.86%, and TOI 1.8%. Have nice gains in all. Looking to trim some CSU and LMN and add to TOI. Would you be comfortable with this move at this time considering each of their fundamentals and valuations? Which do you think has the longest runway for growth and how would you rank them for a 5-10 yr hold.

Also, I have TVK 1.79%, HPS.A 2.02%, PRL 1.41%, WELL 1.91%. No position in DRX (how would you look to avg. into this name?). How would you rank these if you were to add to these positions currently? When looking to add, are you mainly looking at the valuation and fundamentals or does the avg. cost and % return factor into that as well? For example, my HPS.A is up 60% and PRL up 4%, does this factor into your decision of which one to add to or does it not matter and we should just consider the forward return potential? Thanks!

Q: Hi guys,

I have the above in my portfolio at 2.5%, please rank them as to moving them into a FULL position (4%).
thanks
Jim

Q: can you comment on this about DRX from Simply Wall Street. Thank You

New major risk - Earnings quality

The company has a high level of non-cash earnings.

Accrual ratio: 26%

This is considered a major risk. Non-cash earnings can arise from many different things. However, if a company consistently has a high level of non-cash earnings, it may be a sign that they are recognizing revenue from customers before the full value of the sales are received as cash or they are not depreciating the value of their assets appropriately. These are practices that inflate earnings, while not providing a similar increase to cash flows. Companies in some select industries naturally have a high level of non-cash earnings and it is not a major concern. However, in the worst case scenario it can be an early sign of performance manipulation by management.

Q: Instead of buying back shares, would it not have been better for the company for insiders to sell some of their shares to increase liquidity?

Q: Hello 5i Team
I have a 1/2 position in DRX , would you add today after the big run up in the share price after the earnings.
Thanks

Q: 2 questions. 1st your thoughts on results announced today.

2nd. In the release the comany announced "the Corporation intends to enter into private agreements, within 30 days of June 12, 2024, with Jean, Pierre and Marise Paschini, members of the Board of Directors and the Corporation's management team". How should I as an investor view this announcement?
Thanks John

Q: There has been lots of good discussion about these 6 stocks on your forums section over the last year BDT, DRX, GSY, HPS.A, PRL, VHI. All have been big winners. Do you think they are still promising investments at current prices?

Q: Hi, Listening to a recent podcast by Keystone Financial, some concerns were raised about high debt level and low organic growth, with most growth generated from acquisitions for Terravest. Do you agree ?

The stock has been weak recently and is now trading at $73, below the recent secondary issue at $74.25 and $9 below its recent high of $82. The decline could well be market related, with DOW and Industrial Sector under pressure, the whole week and not really company specific - Don't know.

At the same time, ADF Group is hitting new highs, almost every day, ignoring the weakness in the Industrial Sector, in general.

Both these companies are on your recommended list. Also, my understanding, based on your investment approach is that you would rather add to a position with stock seeing strong momentum than average down when a stock is in a downwards trend.

Not sure, if the recent price action makes one of the two stocks better than the other, but if you have $$$ to add, which one will you choose today and why ?

Thank You