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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: Peter, I have owned CSU for quite a while and it is time to rebalance. I would like to keep my IT sector at 20% and I am thinking of selling CSU down to 5% and adding to my other IT stocks namely DSG, ESL and DH. Would you suggest I keep these four stocks or should I add another stock to this sector?

Thanks, Stephen
Read Answer Asked by stephen on October 27, 2015
Q: I was hoping to get your thoughts on Venator's position on CSU:

http://www.venator.ca/uploads/FEB_2015__Final_.pdf

"I just don't like paying for acquisitions that haven't happened yet, and when you pay more than 20x earnings for an otherwise no growth company that is exactly what you are doing. This is why we own Open Text but not Constellation Software. If Open Text doesn't make an acquisition for the next two years it might drop about 10%, putting its valuation on par with Oracle (to name another low growth consolidator); the same scenario played out with the aforementioned Constellation Software would send that stock down over 30%."

CSU's share and earnings growth is largely based on its excellent ability to acquire businesses and less so on on its organic growth. If CSU is unable to acquire companies at the same pace (the larger it gets, the bigger the acquisition required to make an impact), would this not cause a material negative affect on its valuation?
Read Answer Asked by Arneh on October 14, 2015
Q: Read the recent questions re: CSU so will reframe mine as follows:

1. Globe investor shows forward PE at a very reasonable 16.3. Do you concur?

2. The stock has been trading in a range between 530 and 600 for the past three months. CSU has been a massive win for me but has shot up to 13% of my portfolio which I know is too high. It's probably time to abandon the "let winers run" approach and take some money off the table but the real question is this: knowing that a share split is not in the cards per the CEO, and with a tiny yield, have we had our fun? i.e. Do you see a scenario where the stock retests 600 let alone surpasses it?

Thanks as always for your insight.
Read Answer Asked by Kim on October 12, 2015
Q: Good Day,
Is the recent discussion around CSU debentures referring to a new series? I see debentures are already trading in the market and today are priced at $119.66 with a 7.10% yield to reflect the premium. Is there another series coming in Sept? If so are they the same terms as the first tranche? Looks like 8.5% until March 2016 and then 6.5% plus CPI. Most bonds/debentures would get whacked in the next few years if/when interest rates begin to rise but this indexing to inflation will protect against this? Also do you have a credit rating on this as far as credit quality/worthiness? Thank-you
Read Answer Asked by Chris on August 26, 2015
Q: Peter/group I have a right offering on CSU The present cost is 32 cents /share which will allow me to purchase more shares at the present market price of $120. It also pays me 8% in interest ...is this a good investment? Thanks PS I do not fully understand the offering if you could clarify it for me in simple terms. Thanks for steering us poor mortals in the right direction
Read Answer Asked by Terence on August 25, 2015
Q: Anyone who put in a “STOP” was murdered today .
CSU traded as low as $454.00 today … shares were picked up by traders who had software that shows the stop orders on their screens…
By US standards CSU trades relatively thinly - buying the entire sell board of CSU is a no brainer for Goldman and others ... the retail investor is a victim who can't even protect his wealth.

There is NO price low enough to prevent deep pocketed vultures because Level 3 Quotes are available to the privileged few . This is unfair ... and I am angry. I guess this is why you aren't a fan of Stops.
Read Answer Asked by Thomas on August 24, 2015
Q: CSU has fallen dramatically in the last week and I can only attest to 'one' proven fact -- the Frank Effect. My brother purchased this stock this week, and true to form, every time he purchases a stock, it plummets. If you feel it would be of use to your members, I would be pleased to share with everyone when Frank wishes to buy shares in a company -- in that way, we could all avoid some serious losses in our chosen companies. I am concerned enough about this stock market phenomenon, that I make a point of having a portfolio diverse enough from his. Share if you think it's important. : )
Read Answer Asked by Sylvia on August 07, 2015
Q: On your great advice I picked up Constellation Software last year. I made it a full position, and it has now reached 6% including all my portfolios. I am not risk adverse and I don't mind holding winners, but at what total % level should I start to take some profits.

Do you think letting it move up to 10% is ok, or way to risky.

Cheers, Colin.
Read Answer Asked by Colin on August 07, 2015
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