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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: Hello team,

Is it worth paying 80 times the earning for TTWO. Their Redemption II game seem to getting a lot of attention from reviewers and I thought it might be a good time to pick up some shares in this market downturn. Given their balance sheet would you choose them or would you prefer something else in this arena.

Have a wonderful week and thanks as always!
Read Answer Asked by Saeed on November 06, 2018
Q: Hi Peter & Ryan,

The company I work for recently brought in a speaker, Salim Ismail from Singularity University, to talk about 'exponential organizations'. The basic premise was to discuss the speed of innovation and disruption that's occurring today. The improvements in various technology is doubling every year. I can't help but wonder if I need to rethink some of the companies I've invested in (from your portfolios).

For example, he gives the example of the drive train in a combustion car having about 2000 moving parts, while a Tesla has 17. There's a small company in the US called Local Motors that has a car with only has 50 parts total and takes 1 man hour to assemble, compared to the average combustion car that has 25,000 parts and takes 1000 man hours to assemble. What does this mean for a company like Magna? Also, with so few parts, there won't be a need for car maintenance. The use of autonomous cars, which should result in less accidents - how does this affect Boyd? EV's in China are also doubling every year, now at 5%. It doesn't take long before it becomes a very significant portion of the market.

Another example is the energy sector. The price performance of solar energy has also been doubling every 2 years for the past 40 years. At this pace, the world supply of energy could be met in just 13 years. The costs of solar (unsubsidized) has been dropping and is now cheaper than all other forms in the US. Obvious question is where does that leave the energy and pipeline companies? Maybe we should be more focused on solar panel makers and solar energy storage. Again, the shift from combustion to electrical vehicles comes into play here as well.

If a company isn't going to be a disruptor (like Tesla, Google, Uber, Amazon), they at least need to be flexible and adaptable. is this a key metric when you grade a company?

I'm interested in your thoughts.
Thanks
Read Answer Asked by Ian on November 06, 2018
Q: I own GIB and have for several years. I'm thinking of selling some or all my position in GIB and purchasing OPTEX.
My reasoning is that although GIB may not be fully valued, its had a good run, OPTEX on the other hand may have more upside longer term.
Appreciate your feedback
Read Answer Asked by Larry on November 06, 2018
Q: Recent quarterly data from NOA were rather impressive yet the stock was down 9% today. Revenue for the quarter was $84.9 million, compared to $70.0 million for the prior year, an increase of 21.3%.
Adjusted EBITDA for the quarter was $19.1 million compared to $11.5 million for the prior year. Adjusted EBITDA margin was 22.5% compared to 16.4% for the same period last year.
Net income for the quarter was $1.5 million, compared to a net loss of $0.6 million for the prior year. For the three months ended September 30, 2018, gross profit was $14.3 million, or a 16.9% gross profit margin, up from a $5.8 million gross profit or an 8.2% gross profit margin in the same period last year. Would you have any thoughts as I cannot find any other news? Thank you in advance.
Read Answer Asked by Martin on November 06, 2018
Q: I am writing to following up on some of your recent comments regarding this stock after the release of the Spruce Point report. To what extent are you concerned with accounting irregularities regarding Dol's opaque arrangement with Dollar City? Could Dol be using sales to Dollar City as a way of hiding loses or artificially inflating the books? Are you also concerned with the patent infringement lawsuits, including the one mentioned about the pencils that have been sold since 2002? How do you react to the allegations that the market is saturated and may face increasing competition from Amazon and hence, Dol does not deserve it's lofty valuation? Thank you.

Jason
Read Answer Asked by Jason on November 06, 2018
Q: Is there a web site that provides details of buy or sell trades made by company executives, directors or other key management people?
Read Answer Asked by Helen on November 06, 2018
Q: Hello 5I Research
I read that Warren Buffett has bought back his Berkshire Hathaway own shares
is he suggesting that the market is undervalued as a whole ?What are your thoughts with his move ?Should we be buying stocks on the October dip?
Please take credit as deemed appropriate .
Regards
Claudio
Read Answer Asked by claudio on November 06, 2018
Q: Hello, in your response to Arzoo's question regarding international holdings better held in RRSP, you say that generally International companies in an RRSP will not have dividend withholding taxes. I have MDT in my RRSP, and there is a withholding taxes of 20%. I have phoned my online broker about this, and they told me that if a company's main address is outside of Canada / USA (Medtronic is based in Dublin, Ireland) then there will be a 20% taxes. And this even if the company trades on the NYSE. They told me that the RRSP tax treaty between Canada and the US applys only to US domiciliated companies. Do you agree with that? Thanks, Gervais




Read Answer Asked by Gervais on November 06, 2018
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