Investment Q&A

Q: 2 Questions on Lightspeed, the stock has of course dropped like a rock and rebounded significantly from the lows 6 weeks ago, but even still if it were to head back to February highs it would be an increase of 80% from todays price.

I am trying to understand how much revenues can and are being disrupted by their clients business closures at least in the short term. They list in the most recent MD&A, software and payments revenue (cloud-based software subscription licenses and recurring revenue sources including payments solutions) accounted for 89 % of the previous 9 months revenue. Also noting that most clients are on 12 month contracts with monthly payments. With lightspeed payments only being introduced in the previous quarter there cannot be much revenue lost yet as it was more of a future revenue potential not a current revenue driver. I don’t think they breakdown what their cut would be with the current payment partnerships but they would of course lose out on payment fees potentially similar to SQUARE whose Payment volume was down 39% their final 2 weeks of the quarter, but how much do you think that could change Lightspeeds revenue?

Just a quick browse on their website shows they offer and excel in e-commerce for businesses, so some or most clients would be online and able to operate, if not they should and could be scrambling to add the capabilities to operate online, so this should be a net positive for this type of company (omni-channel commerce SaaS) in this changing business landscape due to COVID-19.

With lots of cash on hand to weather the short term storm, a high % of recurring revenue and the desperate need for businesses to be online would you not think Lightspeed for a long term play or even short term is one of the best options out there for growth?

Q: Stock has dropped 20 % past couple of days. Is there anything stock specific?

Q: Under the recent answers about Shopify, LSPD and Kinaxis there is no mention of " authors of these answers, directors, partners of 5i Research have a financial or other interest in any of these at the time of answering the questions.".
What is the reason?

Q: With SHOP entering the POS, how will this affect LSPD's future.
Is this a serious threat?
Thanks

Q: Which do you currently like better for growth. I must admit hearing that SHOP has started down the POS road makes me slightly nervous about LSPD. On the other hand LSPD has a lot of cash DSG a little debt. We also own SHOP, KXS,TEAM,NVDA,CSU,AYX in the tech space. Would be selling LSPD for a tax loss if you think DSG is better.

Q: If one were to take a 5 yr (minimum) position, which would you choose? Or would you take a smaller position in both? I realize they are completely different technologies.
Carl

Q: I am about to triple the size of my investment in the portfolio above and give equal weighting to all. Virtually all of this new money will be in non-registered accounts. In total, this self-directed portfolio will represent 20% of my holdings; I also have 40% in a growth-focused pension fund, and 40% in a mix of ETFs through a robo-advisor.
Do you have any suggested changes to the list of names? I am primarily focused on growth, with a 3-5 year horizon.
Do you recommend a different weighting e.g. heavier on some, lighter on others?
What are your thoughts regarding timing? I am tempted to put all of the new money in now, betting on the sustainability of the recent recovery. But I understand that a phased approach will reduce risk.
Thanks for your help.

Q: Looking for some good growth prospects over the next 5+ years. Don't mind taking on something higher on the risk scale. I am evaluating some stocks that seem to be quality companies that have fallen dramatically. Would you please rank DOO, GOOS, CAE, LSPD as to how much upside you see from the current stock price for a long term hold.

Q: I have a full position in kxs partial position in otex and a small position in lspd. I am looking to add more tech to my tfsa and considering either gib.a or dsg. Which would you recommend and is there much overlap between what I already have and dsg and gib.a? Thank you.

Q: Hi,

What are the top 3-5 Canadian tech companies that you think still undervalued, have potential to recover their heights and to grow beyond that?

Q: Peter, I am interested in buying into Lightspeed and Boyd Group in 2 or 3 tranches. Both companies have earnings coming up in the next couple of weeks. What are the expectations and would you be comfortable buying at these levels, or prefer waiting until after earnings? Thanks so much.

Q: Hi guys great job again.
I have about 5% of lspd in my tfsa and 2 % of bldp. I have noticed that lightspeed as been doing well this past week my concern is since all restaurants are still closed, i know that they have plenty of money but how long can they survive no one as a clue when restaurants will re-open and i believe less people will be dining out. Your thoughts on this company please as should i still hold i have it at $32.75 per share or should i dump and just move on. thank you Wilson

Q: I currently own DSG,KXS,LSPD,OTEX,PHO,SYZ. I know you took out SYZ some time ago and can't find what you replaced this stock with? I know you still follow SYZ and just wondered if you feel that there is a better stock than SYZ or would you continue to hold this stock with the other stock mentioned?
Thanks

Q: Hi 5i,
I currently have shares in LSPD and RESN and looking to add two more tech oriented names, and can be either US or CAN$. Do you have two growth companies you could suggest to start new positions at current share prices, with the intention for a 5 year min hold?
Thank you
Terry

Q: Hi 5i,
Based on your input, I'm looking to stack up on Industrials, Tech, and C. Discretionary. I have a 5-10 year+ timeframe and have a huge focus on outsized YoY revenue growth / returns for my portfolio. I can tolerate a lot of volatility and risk.

1. For Canadian industrials, what would be your top growth picks? Also looking to get one aviation exposure, what would be the best one out of AC, CAE, EIF?

2. For Canadian Tech, I currently have SHOP, KXS, LSPD, REAL. As you can see I'm aiming for outsized YoY Revenue Growth. Can you suggest other names? How does PHO and STC compare with them?

3. I have BYD, DOO, and GOOS. Can you name two MUST HAVES for Consumer Discretionary/Cyclical in the US?

Please subtract credits as you find appropriate. Thanks!

Q: Would you please give me your expert opinion on this particularcompanyHow would you compare it with Shopify. ........... THANKYOU

Q: Given the bounce back has been "quicker" than expected, what would be your top 5 US and CDN growth picks ranked in order with a strong management and balance sheet that would be considered "on sale" still from the Covid effects? Given I have a 5-10 year timeframe. Thanks.

Q: I have multiple questions. Please charge accordingly:
What is Freehold's revised dividend? Time to buy now?
Please comment on Vermillion results. Time to buy at $6?
What is Knight's revised shareholder account after 12M share buyback?
Is Lightspeed rebounding too fast or would you step in now?
Thank you.

Q: Hello Peter,
From your reports, Shopify has an inside ownership of 7.4 percent whereas Lightspeed only has 1 percent. Could this somehow be viewed as Lightspeed's management does not have the same confidence in the company as Shopfiy's? I am looking at LIghtspeed as potentially smaller version of Shopify's and am reluctant to put more than 1 percent given the inside ownership.. Please comment. Also, from the cannabis companies, would Organigrams be decent one at this price? Thank you

Q: I sold Lightspeed at $26.64, and would like to get back in, but I'm wondering if it would be better to wait until the next report on May 21. It will be their annual report, how do you see this report looking, will it reflect any downturn in business due to Covid, or would that be the subsequent report? Thank-you!