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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: Good Morning,

I have not yet finished my homework on Quarterhill, but I need your advice.

In the past nine months Quarterhill has invested US$67,415,000 in the acquisition of three companies (Viziya, IED and iCOMs), I believe these acquisitions were financed by cash on the balance sheet. In the June quarter, revenues were US $12,842,000, in the September quarter revenues were US $72,158,000. Net income was US $26,211,000, plus a onetime charge of US $15,190,000. They have US $40,000,000 in cash. Can Quarterhill repeat these numbers over the next quarters ? If they do, then their annual revenues will be US $280,000,000 and net income will be in the US $100,000,000 range and cash on the balance sheet will be north of $100,000,000.

Current US stock price is $1.73 ($1.73 multiplied by 124,767,000 stocks) and the market capitalization is US $216,000,000. If I deduct the projected cash on the balance sheet for the next twelve months, the enterprise market cap is US $ 116,000,000. These are very good numbers and this is a cheap company. I feel as if I'm my missing something in my analysis? Why is the company so cheap ? Will the new acquisition remove the lumpiness in revenue from quarter to quarter ?
Merci
Read Answer Asked by Gilles on November 28, 2017
Q: Hi - I have $40k to invest for a 8yr old - We expect he will need it for school in 10 years. I would like to put it all into 5 or 6 ETF's that cover the 1) World Index (ex/ USA Canada) 2) Canadian Markets (safest equity) 3) USA Broad Market 4) Fixed income 5) Real Estate income 6) Mortgages or High Yield Bonds - Any suggestions or is there a single ETF that would cover this basket?
Read Answer Asked by Ron on November 28, 2017
Q: Hello 5i Team
I have about $1100 in cash in an RESP account ( grandchildren are 4 and 2 years old) to invest and unsure what sector / stocks to choose next. Current holdings are ECI, ENB, SIA and Car.un with nice gains in all. I want to diversify of course but banks seem expensive right now. Would you please suggest a few alternatives. I have considered Brookfield companies but unfortunately, I think that corporate set up causes tax reporting issues for the sponsor on the RESP account. If you know this to be untrue, please let me know.
Regards
Kathy
Read Answer Asked by Kathy on November 28, 2017
Q: This is a reset preferred that I bought in the $16 range. With increasing interest rates and collecting the interest, I have done quite well. As long as interest is predicted to rise it will increase in value.
I was thinking that about selling if there is a forecast that interest rate will rise again in Dec or Jan. Will use proceeds to buy ENB in The midst of tax loss selling giving me a better dividend and more opportunity for growth. What’s your view on interest rates and buying ENB ?
Read Answer Asked by Roy on November 28, 2017
Q: Hi team,

The stock fell by more than 16% after BTIG downgraded the stock from neutral to sell. Do you think the market reaction to BTIG's report is justified? What do you think of their arguments about bitcoin and tax reform on how they can effect on the stock if they don't work out? Is the stock really worth $30?

Thanks for your unique insight and analysis!
Read Answer Asked by Saeed on November 28, 2017
Q: I have a follow up question to your reply on a question earlier today on Photon:
" PHO has just broken out to a new high on good volume. Typically, this would not be a good time to sell after such a good move. There are no guarantees, of course, and it will fluctuate a lot, but we would view it as a 3 to 5 year position."

What are realistic expectations of returns for holding for his time, how do monitor the results and what flags do you/we look for if the growth is not working?

Thanks
Read Answer Asked by James on November 28, 2017
Q: The laggards in my portfolio are currently NFI, CCL, GTE (only oil & gas exposure) and CBL. Would you suggest dumping any of these names/replacing them with other names or would you suggest holding them for now? Thanks for the great service.
Read Answer Asked by Patrick on November 28, 2017
Q: Hi team,

This question is probably going to highlight my ignorance in this area only, but I am going to ask it any: Would it make sense for CSU to take over DSG in a mega deal? Would there be any synergies from a friendly acquisition? If yes, why CSU is not interested in DSG? or similar large Canadian software companies?
I have both and not sure if there are any advantages in keeping both.
Your feedback and insight is much appreciated.
Read Answer Asked by Saeed on November 28, 2017
Q: I recently read that the energy companies that will benefit most from rising oil prices are conventional producers with low debt. Given this, I am thinking of replacing a position in SGY with WCP. Does this make sense to you? I also have a position in RRX that I would keep.
Read Answer Asked by Ken on November 27, 2017
Q: Is there a Canadian ETF that would track companies in China, such as Tencent, Alibaba, JD.Com, etc?
Read Answer Asked by Brad on November 27, 2017
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