Investment Q&A

Q: hello 5i:
regarding the CVRs issued and your comment on shares held in an RRSP: does this also apply to TFSAs? If they have no value, and can't be taxed anyway, I fail to see why they can't be held.
thanks
Paul L

Q: Hello friends,

Still not sure how to handle NBLY's CVRs. Since they landed in my RRSP account, my broker gave me two options: to sell the security or to transfer it out.

My question though is, if I transfer them out, do I still need to sell them explicitly sometime in 2026 or they will transform (hopefully) into $0.61 per share automatically?

Many thanks!

Q: Hi,
Our NBLY pharmacy shares were bought out and cash received. In our TFSA we now have shares of Neighbourly Pharmacy Inc temp with a purchase price of 24 cents per share with a total value of $168. I got a letter from itrade indicating these shares cannot be in a registered account subject to 50% penalty. Can you please help me understand what these new shares are?
Thanks,
Kerri

Q: Just adding on to the last question on NBLY. Since the arrangement has been approved, would it not be a smart play to purchase shares at around the buyout price in order to have access to the CVR rights? It looks like you would get your investment returned within a week when the deal closes and you could await the result of the CVR at no cost.

Q: Hello,

I am wondering about the merit of purchasing NBLY shares prior to the deal close in order to acquire the Contingent Value Rights (CVR). My thinking is that this would require a short term commitment of capital that could potentially yield a payout in 2026. How likely is it that the EBITDA Target of $128M will be met? If one were to proceed with this strategy when would the shares need to be purchased?

Thank-you

Q: These are the big losers in my portfolios.
So sick of looking at them and waiting for improvement (which I know is unlikely and a bad idea). My wife’s analysis of my investment strategy is “break even quick”. Are any worth holding, or is it time to just jettison the works?
I don’t mind a bit of risk, but am thinking they’re just mistakes, at this point. I believe I have a diversified portfolio over all, with none of these being overweight.

Thanks for your help.
Len

Q: Just a follow up question. If I decide to sell NBLY now, could you recommend 5 of your favorite stocks to replace it in my TSFA?

Thanks

Dave.

Q: Should I sell my shares at $18.30 after the jump this morning or hold onto the shares till March 29 2024 and receive $18.50? Could you also explain what a CVR is and does it mean we have to hold till 2026??

Thank you

Dave.

Q: With Rexall up for sale, who do you feel could be potential buyers. Do you see NBLY in the bidding with the takeover in play?

Q: Hi Team,
I would like your opinion on FMC. The stock is down significantly because one of the key product family is seeing patents expiry-diamides. It probably also moved lower with the rest of the agrobusiness sector-. Do you think it is a good time to take a small position in FMC. I am looking to a 3 to 5 years horizon.

I would also take position in one of the 3 other Cie listed -LIN, CTAS, KBL- due to the fact that I think these are 3 companies that could be fairly resilient in an economic downturn. How would you rank these choices in term of stability and capital appreciation potential ? Other suggestions are welcome!

Take the amount of credit necessary to answer my questions and sub questions!

Thank you,

Michel

Q: Hi,
Happy New Year. Any opinion on when shareholders should expect an update from Persistence Capital Partner on the latest offer? Is there a guideline that companies are required to follow, provide update etc . I believe the old offer was to close in January and the SP continues to drift on no news.
Thanks,
Kerri

Q: Hi 5i Team - In an answer to a question on Sept. 27 you mentioned that Neighbourly had a growing balance sheet, good forward sales and earnings and solid fundamentals with a cautionary note that it was not yet profitable and needed to become so. At that time it traded around $12.50. It seemed to have a lot of potential back then before the offer. If the offer falls through completely and it returned to around that price level would it not still have good potential and be worth buying for a mid to long term hold. Would the same theory hold for today's price of around $15. Also what is your opinion of management. Thanks.

Q: Persistence Capital Partner proposes to take NBLY private at $ 18.5. But the share price still go down to around $15. Why ? Is it a good time to buy ? Thanks a million.

Q: I’m guessing someone else already asked a similar question, but just in case: Do you still see NBLY as a good arbitrage play after the revised purchase price of $18.50?

It’s definitely frustrating (I guess that’s one of the risks when there’s a majority shareholder) but given the share price has adjusted lower I’m thinking it’s still a good arbitrage play from today’s price?

PCP already owns over 50% of the company so the risk of this not going through appears low)?

Q: Hello 5i team,
You entered a position for NBLY of ~$34 in the growth portfolio. Since there was a tentative offer to go private of $20.50, what is the rationale to stay? Is it in anticipation that the offer would not go through and continue to hold going forward into the future?

It seems that there is no reason for this stock to ever go past $20.50 until this is finalized, or am I missing something here.

Thank You,
Andrew

Q: hi, if the financing is not secured by mid January (new) transaction date, and the "deal" does not take place, where do you see the price of NBLY shares ending up? ie what is the possible downside of buying shares at current prices? cheers.

Q: Hello,

Does the pronounced move up in NBLY today indicate that the PCP acquisition has progressed in some significant manner? Earlier news releases reported that PCP had until Nov 13th to complete negotiations. Any insight would be appreciated.

Thank-you,

Stephen

Q: Why is Neighbourly Pharmacy trading down at such a large discount to the offer to take it private at $20.50. It seems undervalued even without the offer. Would it be a buy at todays price. Thanks for your great service.

Q: Dear 5i team.

In early Oct. after the possible take private offer on NBLY was announced, I started keeping tabs on it. From the initial pop the price action is down on a daily basis, it seems.
When do we expect more public info to be released on this one? It sure smells like the old DND bait and switch example of the past year or so and we know how that one has played out. (apologize for the cynical DND comment, but it's the most recent example I could think of)
Is the arbitrage opportunity here picking up speed, or a sign that the market thinks this deal will not complete, thus stay away?

Many thanks for your help.

Q: Hi team,

Just curious on this one, why do you feel the price is falling? Would this be doubts creeping in on the deal being approved?