Investment Q&A

Q: Have held this for 18 months ,been very patient as a lot of BNN analysts have liked it with the promise of "unlocking value" when the company splitting into 2 ,but they only thing that has happened really is the stocks "dropping in value" any reason why and your thoughts for the next year on these 2 companies..thanks.

Q: Looking for financial sector allocation suggestions as replacement for HCG/mortgage sector. Already have positions in EFN/ECN/CXI/BNS/SLF...any suggestions? or okay with going to 20% on tech vs current 15% 35 years old, money is all in registered accounts, little debt, and no need for money in next 10-20 years

Q: Hi 5i Team,

I have a question about Element financial EFN. Just wondering what caused the drop today. What are your thoughts going forward.
Thanks Mike

Q: I know you have answered this before, but I can't find the question. I have a nice gain after buying EFN in anticipation of the spilt and would like to know if you favour one over the other, post spilt, both or should I take a 13% profit and look elsewhere.
Thank you.

Q: Hi Peter,
Ive looked over the q&a on this split. Can you help me understand.
if the split was today...ecn is trading at 3.50 and efn is trading at 16.55. what would happen...

Q: Unfortunately I was exercised on my call options and do not hold a position on EFN presently. Going forward to maintain my port. between the 2 companies, shall I repurchase both or will 5i have a preference to one over the other?

Just wanting to reestablish a position.

Thanks

Sheldon

Q: Can you help me understand what will happen to my 500 shares of EFN, bought @ $13.91, when they split into two companies on Oct 4th. What will I end up owning?? 250 shares of each company or what?? Will I lose any value and how will they value the worth of each of the two separated companies? This is all new stuff to me. I look forward to your explanation

Thanks for your help

Q: call options are being sold today on efn. how is this possible if the stock is to be split on oct 4th into two new stocks. I was interested in selling covered calls for apr 2017.

Q: 'ECN' is trading today; is this the same ECN as is being created out of Element Financial? How is it that it can trade ahead of the split?

Q: If I sold a covered call for EFN e.g. $16 strike for 10/21 expiry, what happens vis-à-vis the proposed split if it occurs before the expiry date? How would the combined strike price be arrived at? Would you recommend avoiding the unknown and not selling the covered call?
thx; Mike

Q: Hi : what is your opinion now that shareholders approved the split in two, Element Fleet and ECN Capital. The shareholders also approved the issue of ECN shares to buy Infor. how do you see the future of these companies. I own EFN and will receive shares of both. Should I keep both ?, sell one, if so which one, or should I sell both ?
thanks !!

Q: Hi 5i team,

I am diversified in my portfolio but I need one more stock to round out my TFSA. From the companies listed can you please rank in order based on your highest conviction in the company to be able to execute shareholder value over the next 5 years.

Thanks as always,

Jon

Q: I wish to sell EFN to raise some cash over the next month. In your opinion is it best to do this before the split in early Oct. or to wait until after the split and see if the stock get a bounce post split.

Thank you for your advice

Q: Preferred Shares - A & C
Which company will they be part of and will the capital structure change?
Will they adequately serviced?

Thanks

Q: Following Efn split, do you feel that this is a good time to add this stock to my portfolio?

Q: I hold EFN in a TD Waterhouse SDRRSP account. What do I do with the current EFN shares I hold? Do I have to sell and decide which spin-off I want? If I choose to do nothing what would happen to my shares?

Q: Recently I've sold some non performing stocks as well as stocks that were a very small portion of my portfolio in an effort to concentrate my portfolio on some higher quality, better performing stocks and I've come up with these 6. Wondering if you could rank these based on risk from less risky to most risky. I'm fairly conservative, tend to hold good quality companies for long periods (5-10 years) and I don't like a lot of volatility - I'd rather get a 5% return and sleep at night than a 10% return and stress about it.

Q: i bought efn because it was financial operating in a different niche than the banks or lifeco's. i'm looking to add some more and bring it up to 1/2 position in my portfolio. add now or wait for the split? if wait for the split, stick to the leasing business?

Q: Hi 5i team,

From the growth stocks listed above what would be your top 5 for expected stock performance over the next 3 - 5 years.

Feel free to take as many question credits as you feel necessary.

Much appreciated,

Jon

Q: I read Element Financials conference call transcript for Q2 and this what I got from it.

They have been winding down 2 portions of their businesses which intern has,
1) Reduced originations and lowered EPS
2) Returned capital to make them M&A ready
3) Short term from "30,000 ft view" makes them look like they are falling apart
4) But, closing these business books will allow them to redeploy the capital to much higher ROE investments to grow earnings faster

The split of the company has put some of it's business activity on hold,
1) M&A has been stopped until the split so no big growth in Q2 and Q3
2) 3 immediate acquisition targets will be pursued when split happens
3) New funds will be launched for income growth and to free up capital for M&A
4) Expect some major accretive acquisition(s) to happen and possible surprise earnings either in Q4 or Q1.

So in conclusion they are setting themselves up for greater growth and shareholder value. To do this they have to sacrifice income in the short term to strengthen their capital, plus delay growth until the split occurs.

Is my simplified summary similar to 5i's consensus on this company?

Thanks, Shane