Investment Q&A

Q: Hi, Just to clarify further about the debentures - If Constellation decides to redeem the debentures, Only the Warrant holders will have the ability to buy the new debentures and in the ratio of 1 warrant providing a right to by 1 debenture. So, the Debenture holders ( with redemption called ), can only swap/buy the new debentures with No Redemption clause, would need to either already have or buy the warrants in the market. If not, they will be exposed to a capital loss of, say. $37, for each debenture.

In our situation, we have currently 500 CSU.DB debentures and only 250 warrants. So, in a Redemption call scenario, we should be prepared to Buy 250 additional warrants in the market, if we want to swap/buy to retain the same no. of 500 debentures ownership. Is this correct ? And, for this reason, there could be a huge demand for these warrants, when called for redemption, because, a large no. of debenture holders, may not necessarily already have those warrants.

Will the New Debentures be listed as a separate security, in addition to the existing debentures CSU.DB ?

Thank You

Q: Hello, Based on 0.33 CSU.RT, purchase and cost of 3.03 rights being 0.33x3.03= $0.99. We can acquire new CSU debentures at a total cost of $133+0.99=$134 appx ( FV $100 and Debentures with no right with management to redeem ). Does it sound accurate ?

Questions:

1. CSU debentures ( existing ) are currently trading at $137. What do you expect the trading range of New Debentures, which will be listed after Oct 6 ? My assumption is that new debentures could trade at a higher price than $137, due to No Management redemption right ( All other terms, interest etc being identical to present debentures ).

2. These debentures will pay interest based on 6.5% + 0r - Rate of change of CPI, over preceding 12 months, as at Mar 31, each year. Looking at the present and projected inflation scenario, if the rate of increase of CPI, declines over time, compared to current high rate, the annual interest rate for debentures could see a decline. Would this not cause the Debenture ( like other Bonds ) market value/price to decline ?

Please correct these assumptions and provide your thoughts. Thank You

Q: Sorry for another inquiry about CSU. This was listed in my brokerage account.

WTS CONSTELLATION SOFTWARE INC EXP 03/31/2040
INC EXP 03/31/2040 EXP 03/31/2040 SPINOFF ON 28 SHS ***CONSTELLATION SOFTWARE INC REC 08/24/23 PAY 08/30/2

What does this mean? Are these the rights or the warrants?
Can I do anything with them yet? If yes what and how? Im with a banking brokerage firm so independent of any personal advisor/broker.

Thanks
Jeff

Q: Hello 5i Research,
I have read the recent questions and answers about CSU rights. I have some interest in becoming a CSU debenture holder. I'd like to know what strategy you recommend: selling the rights I've obtained or buying them on the secondary market? How do you assess the value of the rights? Are they overvalued, undervalued or well valued? Or, given the low price of $0.53, do I buy as many rights as I need to buy as many debentures as I want to hold? Thanks for your help, Eric

Q: One of the thing most analyst covering CSU along with 5i is how they have not issued new shares since going public. The stock is up over 15,000% and seems to be more growth ahead. If they have not issued any shares hows the stock up 15,000%? is this just new investors buying the limited shares that are traded at higher and higher prices and holding on to them?

Q: After reading the questions and answers about the new offering csu has made to share holders. I am still a little confused. Do I have an option to buy? Are they shares? How much will they be? Should I buy them? Will I be able to sell them? Why are they being offered? Thanks I really appreciate your insight
Stephen

Q: Wts constellation software 20 shares, 0 value appears in my account….. can you please enlighten me….

Q: Your opinion on WTS-constellation 31MAR40. Thank you. Fooklin

Q: Two questions pertaining to CSU issuing warrants to CSU stock holds. 1) Were the warrants issued in lieu of September’s dividend payment? 2) What is the advantage to CSU to issue these warrants? Thanks … Cal

Q: Can I ask what would your top 5 stocks to purchase right now? 3-5yr outlook. CAD or US?

Q: Hello,

I just received in my brokerage account - WTS-CONSTELLATION 31MAR40, I know it is something to do with a warrant, but, I am not sure what it gives me or what it allows me to do, any ideas ?

Q: Im looking for a site (free if possible) which notes company's yearly and quarterly metrics such as ROE, ROA , revenue growth, eps etc going back 10 years or so. Morningstar used to have quite a nice table, under the heading KEY RATIOS, gong back 10 years on most stocks such as CSU outlining these metrics, but its gone from their site. It gave a great history of the company in a one page table.
Thanks
jeff

Q: Would I be able to move a portion the CSU warrants into my TFSA as an annual contribution?

Q: Looking for stocks based on the same business model as CSU AME and TDG - collection of entrepreneurial businesses in same sector growing organically and by acquisition, leaving managers and ulture intact [provide corporate support] with siognificant market share and pricing power. I think that describes these 3 companies. Please identify others and rank all with initial buy prices.

Q: Everyone, I will need to allocate funds to: CSU or LMN or TOI. I am already overweight in CSU ( I have held the stock since $110) and LMN. My preference is still CSU and I am not afraid of being over - overweight in the best stock in Canada).
Your thoughts.

Q: Could you explain what rights are and the difference between them and warrants. Is it beneficial to own these and how does one buy or obtain them?
Thanks
Jeff

Q: In a recent question you answered " we think one of the most important skills for investors who choose to own high-quality compounders is the willingness to hold them through thick and thin, even in periods when they appear to be fully valued (or slightly overvalued)."
With this in mind could you please give a list of canadian high-quality compounders that you would recommend initiating a position in and holding through thick and thin.
Could you please include their sector designation and yield.
I am interested and low yield ones for a non registered account but would also like to see your higher yield ones too.
Thanks

Q: If you have been this today do not bother answering this question. The rights issued by CSU as a special dividend. Why is CSU bothering with financial engineering rather than just running the company. This appears to be a wasteful cost and use of company brain power for no fundamental gain.

Q: Hi 5i,
These holding are all in my RRSP, 12 months from retirement, I'm planning to sell 80% of TOI, LMN, NVDA (not now) waiting for "better time" if it's possible to catch it. Can I have 2 or 3 suggestions for income + a bit of growth.
thank you 5i for all your great work!!!

Q: Hi Team,
For an 18 year old who just opened their TFSA and starting with $6500, what stocks or ETFs (CDN and/or US) would you start with? There are no trading fees so there is no worry to buy 10 names if that is the best way forward.
Thanks