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Investment Q&A

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Q: Untangling the relationship between ECN and EFN is above my pay grade, but hopefully not above yours. Are there any lingering connections which would keep these entities tied together, where fundamental problems in EFN could leech into ECN? Or are they now completely and absolutely separate? Thanks again!
Read Answer Asked by Alex on March 19, 2018
Q: hi folks:

not a question; just a PSA for the membership

executive summary: mgmt is likely the most important issue when buying shares in a business

in the case of EFN (as with newcourt) it sure seems like mr Hudson learned nothing

a sad loss of capital

(this from august 2015 )
Asked by Robert on August 27, 2015
Q: hi folks
further to an earlier email on element with respect to mgmt
I remember when newcourt and steve hudson had their heyday in financing in the 1990's and early 2000's

from my recollection there was a lot of 'creative accounting' (a term updated recently to "financial engineering")

question: in light of this 2.2BB issue today (which increases the company capital structure by almost 40%) what makes anyone believe that this mgmt is any more competent than when they near bankrupted newcourt?

one thing of interest being they didn't borrow the whole 2.2bb

comments?

thanks for your insight

robert

5i Research Answer:
Element learned some very good lessons at Newcourt, and has not repeated them in companies since. It was not perfect, but if management takes away valuable lessons we can still support them (Tourmaline management had some issues at Berkley Petroleum in the 1990s, and learned lessons there also). While the ending was not what some expected, keep in mind that Newcourt was still successfully sold (for more than $2.4 billion). We have quoted a Globe article below: We think the key is the short term borrowing switch. This issue does underscore that shift.

Mr. Hudson says he has learned his lessons from Newcourt. Don't expand too fast with acquisitions. Use the most conservative accounting. And perhaps most crucially, don't borrow short-term and lend long-term.

Newcourt funded itself in the commercial paper market, borrowing for a few days or weeks at a time, while lending money for months or years. As a result, the company constantly had to roll over its financing. When markets shut down because of a financial crisis in Russia and Asia, Newcourt was on thin ice.



Read Answer Asked by Robert on March 18, 2018
Q: Good morning. Looking to add a few stocks (services, financial, utilities) for 5+yr hold with growth and income. EFN, AD & ENB are my front runners, respectively. Could you suggest one other alternative to each of those three that you would recommend? especially interested in your opinion on EFN today with their earnings news. And what is EFN payout ratio? great service thx. I am 35 years of age with higher-risk tolerance.
Read Answer Asked by Gordon on March 15, 2018
Q: Down 50% and 35% respectively on these two companies. Would you move on and put what is left of my money somewhere else? Been holding XTC for three years and EFN for over a year. Is there any catalysts coming soon worth waiting for. Thanks.
Read Answer Asked by Helen on March 14, 2018
Q: EFN came out with an outlook that was a bit gloomy, expecting earnings to be down a few percent, yet the stock and the rate reset bond dropped by about a third. They say that a "turnaround" in earnings is not due until 2020. The yield on the bond is now well over 8.5%. Can you give me your opinion of this rate reset bond? and of the company's prospects? Is the dividend safe?
Read Answer Asked by arnold on February 26, 2018
Q: Hi guys. Resubmitting question through the public system
EFN has been a beart breaker but i would appreciate your comments on the prefs specifically the A’s and the E’s. Hav taken an ugly hit along with the commons. Any thoughts on the stability of these prefs would be appreciated re stability of dividend Thanks David
Read Answer Asked by Micah on February 09, 2018
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