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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: Hi, As part of a portfolio cleanup I am considering replacing <1% positions in DSG and ESL, and adding some more cash and add a full position in OTC. Does this make sense? With the new purchase of DELL EMC enterprise..I think OTC has positioned itself for growth. Are the liabilities increasing due to this purchase? How does it plan to fund this purchase? Do you think it would be better idea to wait for the benefits/issues due to this purchase to sink in?
Read Answer Asked by Shyam on September 19, 2016
Q: Hi 5i Research team, I have a long term horizon, and more of a growth oriented investor profile. I prefer to well understand the companies I invest in. The technology sector represents a challenge for me in terms of software products, competition, rapidly changing conditions, obsolescence, variety of software portfolio, etc. So I would like to built a sector exposure based on a few companies instead of using an ETF. Based on reading 5i Research, I am thinking a combination of CSU, KXS, GIB.A, OTC, ESL, DSG, TCS, SYZ,SH. Do you agree with this strategy? Would you include some other companies in this list or replace some? In what order would you rank them in terms of total return potential over long term and overall quality? How many of them would be enough? Would you suggest another weighting than equal weight (2% each)? I also need criteria to manage this group since my understanding won't be up to par. How will I know when to sell, or when to over or underweight in some companies? I would not want to react too strongly to short term events (quarterly results). How would you suggest I implement this strategy (buying strategy)? Thank you, Eric
Read Answer Asked by Eric on September 12, 2016
Q: I don't own this company (DSG) but it seems to have a pretty good price trend for several years. In particular from Mar2010 to Mar2016 its stock price rose from aprox. 6.3 to 23 or about 265%. Looking at its financials, it reported AEBITDA of .36 in Mar2010 and .80 in 2016 for a total increase over the same period of 122%. That seems odd given the price appreciation. In addition this is a growth rate in per share AEBITDA of only ~14% over the 6 year period resulting in a PEG ratio (using AEBITDA) of ~ 2.41. So my question is: Why is this stock so loved? Yes it has consistent "earnings" but they don't match the stock price appreciation. In their latest annual report they say they have a CAGR of 24% but that is not on a per share basis. So again what am I missing?
Cheers & thanks for the great service.
Read Answer Asked by John on August 25, 2016
Q: Good Morning Peter, Ryan, and Team,
I manage an income oriented account which closely tracks the 5i Income Portfolio. However within that account I do have a small basket of more growthy but still steady eddy names with position weights of 2% each. The idea is to squeeze out a bit more return than just income stocks over time. The present holdings are GUD, SIS, ESL, SYZ, BCI, PKI. I was thinking of adding FSV and DSG to this group. Your feedback would be greatly appreciated. Thank you. DL
Read Answer Asked by Dennis on July 18, 2016
Q: I currently have, CSU,DSG,TNC,ESL, SYZ. I also have a little bit of MDA, BB, and AVO. I am not sure if these would be considered Tech or not.

I would like to add KXS. My portfolio is ~12% towards this space, and I remember reading that you are ok with 15 or 20%.

Anyhow, before adding KXS, should I sell some of the above, and concentrate my holdings?

I have done well on DSG and am up 70%, should I just sell it and move to KXS, or just add KXS?

Thanks for the guidance.

Cheers.
Read Answer Asked by Colin on July 18, 2016
Q: I have 15% of my well diversified portfolio in Tech stocks. I am thinking of consolidating my 7 stocks into a smaller number of stocks - perhaps down to 5. I have 2%-3% in all the mentioned companies except SYZ at 1%. Any suggestions as to which companies to sell and which ones to "top up" would be appreciated, or maybe just leave as is.
Read Answer Asked by David on July 11, 2016
Q: In an transaction to-day DH was sold inadvertently instead of DSG. Since something had to be sold, would you think it is preferable to hold the DSG and let the DH be gone or sell the DSG and repurchase the DH. Commissions are negligible and there is no capital loss involved and an accompanying sale (capital loss) covers any capital gains.
Read Answer Asked by Paul on April 21, 2016
Q: To increase our investments up to your most recent sector allocations for 2016 (about equal),I plan to purchase or top-up the following.
Info Tech Descartes Systems DSG
Consumer Staples alimentation Couch Tard ATD.b
Materials Agnico Eagle Mines AEM
Utilities Fortis FTS
Industrials MacDonald Dettwiler MDA
Your comments and/or suggestions for something better at this time will,as always,be appreciated.
Also,are REIT`s a separatr sector for 2016?
Thanks
Read Answer Asked by James Robertson on February 02, 2016
Q: Hi, after watching for nearly 2 years, I bought a small position on DEC/4 @26.27. The stock continues to steadily rise over past few years delivering in almost every quarter. I like the Global Logistics network business and huge opportunity in the future. DSG operates in small and medium scale business segments. What competition DSG has in this field? Also, it appears that co. has generated most of its growth thro' acquisitions. Is slowing organic growth an issue? Also from valuation perspective, how does it compare with CSU and KXS? Should I wait for adding to my position? I also noted that Descartes has a very large Institutional ownership, 88% per nasdaq.com, with some well know names like T. Rowe Price (13%, started and added this year July, 2015)and Mawer, BMO, Neuberger, CC&L etc. It could reduce liquidity, but is it a strong signal in favour of thsis company ? Thanks for your help, as always.
Read Answer Asked by rajeev on December 07, 2015
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