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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 Peter,
I would appreciate some explanation as to why investors may see the equity investment into Canopy (Constellation) and Cronos (Altria) as more positive than joint partnerships formed by Hexo (Molsons) and Tilray (Anheuser-Busch). I would think the partnerships show greater commitment by Hexo and Tilray management not to give up so much control of the companies. However, the equity investment could be seen as infusing cash and they are US companies (Constellation and Altria) with lots of exposure. Would you diversify your monies across all four or forget Hexo and Tilray as the market does not seem to like what they did or atleast not as much as Canopy and Cronos. Thanks very much.
Read Answer Asked by umedali on February 01, 2019
Q: Good day gentlemen,
I am attempting to differentiate between the largest Canadian producers on a valuation basis...specifically EV/EBITDA. As 2018 and 2019 will be ramp up years for most of these companies, Can you provide this estimated figure for years 2019 and 2020 for these companies and any others you may have in this sector.
Read Answer Asked by Giuseppe on November 21, 2018
Q: Good day gentlemen,
This company seems to hold 400M in cash. I believe that is roughly 2$ per share. Can you confirm? Also, the contract with Quebec is for 20k kilos in year 1, with increases every year for total c. 200k kilos over 5 years. I looked at the latest financials I could find on their site. It seams their selling price for past periods was 10$ per gram. I know that this is not possible with the Quebec contract. As a back of the envelope calculation, would it not be conservative to think they could NET 2$ or 3$ per gram on this contract.
Would that not make this stock extremely cheap? Also I notice most analysis is done on EV / Ebitda, can you explain the difference between this and P/E. why do they use this and not future P/E.
Thanks
Read Answer Asked by Giuseppe on October 25, 2018
Q: I own HEXO in the weed space. I see this stock and other majors have been falling since legalization. What do you think accounts for this? I'm speculating that a lot of people enjoyed the run up but set the legalization date as their exit point because a lot of companies' stock price will go downhill once they start reporting earnings. I'm thinking about selling to crystalize my 15% gain which was a 40% gain a few weeks ago. Thoughts? Comments?
Read Answer Asked by Grant on October 23, 2018
Q: It is difficult to evaluate the cannabis industry at this early stage. I wonder if I can get your opinion on the Medical side of the industry. With a longer term outlook and possibly our Canadian companies supplying the world with high grade medical cannabis, can you talk a little about the Companies you like in order of perference?
Read Answer Asked by Randy on September 25, 2018
Q: Hexo (Hydropothecary) has an activist investor that owns 2.5% of shares is pushing for HEXO to put the company up for sale , privatize it etc What percentage of a company does an institution require before it can push for any change? Is HEXO required to take action? If the company is to put it up for sale and assume it gets $10 per share, would a similar price be offered to shareholders if it goes private (rather than selling publicly). I can see why the activist is pushing for change as HEXO has made significant progress (in deals) and the price has not reflected the positive aspects incomparison to other companies like Canopy, Tilray etc Do you think HEXO will take this seriously (I know it is speculative on your part, but from your experience) Lastly, Stars group is now in the dog category and moving well below 200 day average. This is not good news. Comments please
Read Answer Asked by umedali on September 07, 2018
Q: Hello Peter,
What do you think about the joint venture between Hydropothecary and Molson's? Does this put Hydropothecary in the same category with Canopy (with Constellation equity) in terms of market perception? Aphria's results look fine, but why is the stock down? Is Brookfield Infrastructure a good buy given its takeover over of Enercare? Also, i noticed from BNN guests who are considered value investors that all of them had vary different views on Enercare from dont buy to hold to top pick. Can you shed some light as to why the views are so different given they all look at fundamentals? Lastly, what is happening with Grande West. It goes up and than back down again. Thanks.
Read Answer Asked by umedali on August 02, 2018
Q: Hello Peter,
Are you able to shed more light on this stock? I have asked before but the response was vague and I can understand as most of these companies are not producing sizable revenues. They seem to have captured the Quebec market , yet the stock is not moving with the sector. Today, all of them are moving up except for Hydropothecary. Is it time to dump it and move into Organigram (OGI) etc Thanks
Read Answer Asked by umedali on June 21, 2018
Q: HI Peter,
I asked about Knight in a previous question but I did not get a clear answer. Perhaps, you are tired of answering the same type of questions. The main question from my end is why are analysts not putting pressure on Knight? Normally, with other stocks, there are sells, hold etc but for gud, i don't see alot of press. Please clarify. I understand that cannabis valuations are very high, but when i look at Hydropothecary, they have signed deals in Quebec and basically has a large share going forward, yet this company in comparison to others like Canopy do not get much attention. Canopy is much bigger but does it deserve 7 times the market cap than Hydropothecary? Can you please shed light on this? I wonder if it is the same situation is Organigrams which is finally getting some attention. Lastly, do you feel tech stocks have had a good run (i.e shopify), spotify etc and it is time to take some profits. Thanks again.
Read Answer Asked by umedali on June 06, 2018
Q: Hydropothecary Corp announced yesterday after the close the Acceleration of the Warrant Expiry Date. The press release reads that they ' elected to exercise their right'. If they have the choice, why would they chose to do so at this time? This company is speculated to be a takeover in the medical marijuana space so would this part of their process to clean up their balance sheet?
Read Answer Asked by Gordon on May 28, 2018
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