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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: Hi- are there any equities on the TSX you see having compelling valuation right now, particularly for a young, longer term investor.
Jordan

Read Answer Asked by Jordan on December 21, 2021

Q: Hello Peter,
For the potential surge in EV stocks in 2022, i am considering investing in rare earths and am trying to decide between Neo Performance in Canada or MP materials in US. Which one do you feel is better for longer term in the EV sector? Also, is there any news on Nuvei for big increase in share price today or is it simply catching up after the short seller report? Thanks very much.

Read Answer Asked by umedali on December 20, 2021

Q: Hello,

I am down about 60% on NVEI which I hold in a non-registered account. Would it make sense to sell for tax loss purposes? If yes, what stock would you suggest I invest the sale proceeds in, in the event there is a bounce in the market in January? I have a 3-5 year time horizon.

Thank you

Read Answer Asked by Vir on December 16, 2021

Q: Hi 5i,
I’m in the process of rebalancing my RRSP and TFSA and looking to be greedy while others are fearful.
Specifically moving TD, FTS, T, and LNF to an RRSP so that my TFSA can be growth oriented.
My remaining TFSA positions would be as follows:
- Half Positions: NVEI, EGLX, LSPD, WELL, U, APPS, BAM.A, SIS, DND, BYD, MITK
- Full Positions: GSY, TOI, CRWD, ATZ

I am planning to deploy as follows:
- Complete existing positions: NVEI, LSPD, APPS, U
- New Partial Positions: AT, XYL
- New Full Positions: DOL, SHOP, VEEV, ANRG, ATD, TIXT
Would you swap out anything on this list that would better compliment my existing positions? I have a 10+ year horizon so I’m leaning towards aggressiveness.

Thanks!

Read Answer Asked by Kyle on December 16, 2021

Q: Your answer to a member's question on LSPD and NVEI being "expensive stocks" and your interpretaion they are still considered expensive ones inspite of selling at roughly 1/3 of their peak prices, is not understandable as there are many non software companies whose stocks are selling at around 15-20 times their sales. Why don't we admit that it is the short attack as the only reason for this decline instead of beating around the bush.

Read Answer Asked by Sriram on December 14, 2021

Q: Hi 5i,
I sometimes have trouble following your metrics. Yesterday, in an answer to Steve, you said that LSPD and NVEI were still expensive at 9x and 8x sales respectively. That makes sense and with little difference in the two. When I look at the 5i members’ database, I see LSPD at 16 x sales and NVEI at 6x sales. Here, NVEI is clearly the cheaper of the two. This makes it difficult sometimes to assess a company. Why the differences?
Thanks again.
Dave

Read Answer Asked by Dave on December 14, 2021

Q: Both companies are trading at roughly a third of their 52 week highs. Being such you have answered recent questions saying they are expensive. I assumed they wouldn't be. At what price are they not expensive and what metric do you use for this. I'm trying to improve my investing skills and make some sense of this.

Thanks Steve

Read Answer Asked by Steve on December 13, 2021

Q: Since both stocks have been hit hard of late - for similar reasons. Which stock would you think has the best chance of short-term recovery and long-term success. I own some NVEI shares but was wondering if it might be good to trigger the loss and replace with LSPD shares if it had a stronger outlook. Or if going a more conservative route - what 3 or 4 stocks would you say have decent growth prospects and good valuations and could pick up a decent amount of shares if have about $5k?

Read Answer Asked by Stephen on December 10, 2021

Q: I agree with Joel about the passive response from Canadian companies and sometimes you need to give the antagonist a bloody nose otherwise they will never stop doing this. These shorters need our shares to short and the institutions are only allowed to lend those out from a margin account, so I believe. I do wonder if in fact that is the case.
The only way you can be sure that your shares are secure in your regular account is if you hold those shares physically as stock certificates. Who does that today in this electronic age?

The regulators need to do much more in preventing this rape of our portfolios happening.

If nothing is done, no stock will be safe, this will continue, people will still panic and the long term objective of realizing your nest egg will take a lot longer as these attacks can technicaly damage the stock.

I have been a customer of 5i since 2013 and am in a position that I am very comfortable with my portfolio today thanks to your help. I very rarely need to ask a question and therefore I am happy to donate 3/4 of my 168 question credits.

Keep up the good work

Peter

Read Answer Asked by Peter on December 09, 2021

Q: Its great when companies that are under short attack, such as LSPD and now also NVEI, post earnings in successive quarters to prove up their business and invalidate the short thesis. But why stop there? Why do these companies not take the opportunity to very aggressively buy back their own shares? Even if it requires adding some leverage to the balance sheet with cheap debt if needed. Reducing the float is good for earnings, good for existing shareholders and very bad for short sellers.

The passive response of Canadian companies under attack invites more attacks. Carl Ichan killed some very committed shorts in Herbalife, a truly garbage company, using more aggressive tactics.

Thanks.

Read Answer Asked by Joel on December 09, 2021

Q: Good Morning Peter & Team,

You are going to correct me where I am wrong as you should, but I am having a struggle understanding how a company such as NVEI can experience a 50% share value loss in less than 24 hours based on a report generated by a third party the contents of which may very well be exaggerated and dare I say it, even worse be false in nature purely for the purpose of profiteering on a short bet. Are there not laws in place to prevent this kind of market manipulation from taking place? How can investors such as ourselves protect ourselves from this? Maybe the first step is to avoid investing in stocks which have high multiples like NVEI @ 121? That doesn't seem to make sense considering other companies having much high multiples i.e. TSLA @ P/E 341

Thanks for all you do

gm

Read Answer Asked by Gord on December 08, 2021

Q: Mr. Left of Citron is defending NUVEI by dismissing some of the claims about the CEO's college and driving records. But also adding NUVEI's financials were audited by Price Waterhouse Coopers, and he expects analysts and companies to defend NUVEI. Quote: Left Buys The Dip: After Wednesday’s crash, Left tweeted that he bought the dip in Nuvei. “Spruce report says word fraud 48 times..yet no proof of fraud. Easy to find cust. complaints on any company. Who cares if CEO did not graduate college or has a driving record,” Left said.

Left also pointed out that Nuvei’s financials have been audited by PricewaterhouseCoopers, an extremely reputable auditing firm.

He went on to praise the investigative work conducted by Spruce Point but said he is betting on PriceWaterhouseCooper’s audit over Spruce Point’s investigation.

Not sure what to make of one short seller opposing the short attack of another short seller. Any brief thoughts on this. If you cover this idea in other questions, ignore this one. Thanks

Read Answer Asked by Gordon on December 08, 2021

Q: Hi 5I
I have $180,000 split evenly amongst above companies in RRSP. I was going to begin withdrawing $10,000 every year and am looking for strategy to draw down to maximize growth of account. Is there a ranking of companies to sell first, or take a bit from each? I like them all so tough call for me. Appreciate all your advice since my initial membership in 5I.

Read Answer Asked by Craig on December 08, 2021