Investment Q&A

Q: Can you please further my understanding of enterprise value. I think it is the name that throws me off.

I fully understand how its calculation works, I fully understand how the ratios work but I have difficulty with the term. I feel like things are backwards.

For example: If we have a company that has a Market Cap of $1M, it has an enterprise VALUE of $1M (assuming no debt, no cash,...). If the company has a Market Cap of $1M and $1M in debt, it has an enterprise VALUE of $2M. This company has a VALUE of $2M vs the other company that has a VALUE of $1M. If these were 2 competitors, I would prefer the company with the LOWER VALUE (and that is the way it is but the numbers actually reflect the opposite). If I was buying the business, I would probably want to pay $0 for the company with the debt ($1M market cap - $1m Debt) and $1M for the company with no debt.

If a company has cash, I would want to pay market cap PLUS its cash / cash equivalent but in determining VALUE we deduct the amount. Once again it appears backwards.

I must be missing something here. Personally, per my understanding, I would have deducted debt and added cash to determine the VALUE of the enterprise.

It is the word VALUE that throws me off. Can you please shed some light on this. Thank You.

Q: Hi team,

TOY dropped by more than 7% on Friday, apparently in sympathy with Mattel. Do we know what % of TOY's sales will be affected without ToyRUs? Do we know how much ToyRUs owes TOY,(Actual number or as % of receivables)? Without ToyRUs, what other outlets TOY could use (brick&mortar or online)to sell its product? Are any of these outlets already sell TOY's product? How fast can TOY adjust/respond to these changes? How much Christmas sales are expected to be affected because of this disruption in the company's sale of its product?

Thank you for being the go-to-person for small investors!

Q: Hi I am looking to do some tax loss selling. DGC DOWN 25%, GUD DOWN 13%, RNW DOWN 5%, ENB down 5% and SIS down 4%.
Could you give me some options to repurchase for each company if I decide to sell any or all of the above?

Q: Hello 5i team members,
I am thinking of selling raging river for a tax loss. Can you tell me what might be a suitable replacement for it?
Thanks

Q: Rogers is up some 37% in a year, 54% since I bought it in 2015, not including the dividend, blowing await Telus and BCE. Clearly the addiction to cell phones and data is growing and NHL Gamecentre has to be a real positive for them in getting subscribers. Just expanded LTE wireless in Manitoba. Do you think there's still legs or has it ahead of itself. Sell and pay the cap gain taxes or hang on for more good things?

Q: Question about index returns, and whether individuals can exactly replicate. How does delisting one company and introducing a new company work? For an individual, we would have to sell a loser at presumably a loss, and buy a very small amount of a new company and wait quite a while to recover. But the index is market weighted. So how much of the new company is "bought" on introduction. A lot has been made of the importance of low fees on returns as they compound over decades. Is there a discrepancy here that might amount to 0.5% annual gain that real world investing cannot access?

Q: Hi Guys... the company seems to firing on all cylinders... with some pretty decent institutional holders...am i missing something...please advise...

Regards
Anthony

Q: Hello Peter,
I am very fortunate to have recently received an inheritance and am considering the following as inclusion into a TFSA. (SIS) Savaria, (SYZ) Sylogist, (ZCL) ZCL Composites, and (XTC) Exco Technologies.
I would appreciate any feedback you could offer regarding these considerations.
Thank you,
Rick

Q: I have read that the Fed dot plots are showing a 3% Fed Funds Rate within three years. That should imply a 10 year bond rate of 4% to 5% at that time. If so, would that be negative for bond proxies such as utilities, pipelines. telcos and reits? What about high yield corporate bonds? Should we stay away from rate sensitive investments and concentrate of growth stocks? I am a retiree with a need for income.

Thanks

Q: the company appears to have superior metrics to BCE, Telus and Rogers - P/E, EV/EBITDA, P/Free Cashflow and a 7.5% dividend. it also has dealt with some accounting issues. what do you think of the stock? do you think Brexit will affect the company?

Thanks Ken

Q: Over the past 5 years, MRT.UN is down to about $14 from its highs of $19 +, whereas MRG.UN is up to $15.60 from just over $10. Is this difference all down to the U.S. property market being better than Canadian in terms of growth ? Is that likely to continue ?

What is your take on these 2 REITS and on the sector generally ?

Q: Hello, I am interested in your assessment of the gold mining company and if you think it is worth buy shares.

Thank you
Laureen

Q: I would like to add one of these companies to my US RRSP.How would you rank them for growth and stability ?
Thanks,
Sharon

Q: Hi peter and Team,
I have some ENF in my RIF A/C and loosing about 10%, am thinking to replace with a similar stock. Can you suggest one or two ?
Thanks as always,
Regards,
Tak

Q: I have held these loss stocks in my well-diversified portfolio for many years. I am willing to wait for a turnaround and do not need the cash. Which if any would you recommend selling now if you consider holding them to be a lost cause. Thank you

Q: I want to add to the Income Portfolio and I am wondering what the best addition would be. Over the past 3months SPB WSP and AGU have been the stronger performers while KWH has under performed. Am I better to add to the weaker one and maintain the percentage share of the portfolio or go with strength. If you were adding to the portfolio today which would you choose?
Thanks
Mike

Q: I have about 12% of my portfolio in MSI , was thinking of reducing it to 6% & with the proceeds from the sale buying the new RBC etf RUE.Currently I don't have much exposure to the United States except indirectly through TD & SIS.Your thoughts & comments on this would be appreciated.
Thanks,
Dave

Q: Hi,

I have a few questions:

1) What is your comment on the current price of JKHY? Is it too expensive or overvalued?

2) Amazon's price rose almost by $130 this week. Is it too expensive now? Should I wait for pullback to add more or sell half position?

3) What do you think Apple's growth prospects are? Is it worth it to buy now?

4) What is your comment on OCLR?

5) I still have a number of question credits left in my account for this year's membership, will they carry over into my next year of membership (I have already purchased next year's membership)?

Thank you!

Q: Hi Peter,
ALGN went up 16% on Friday. They seem to be doing well.
1) Any concerns about opening a position in the stock now? Is the valuation getting stretched?
2) Are they Heathcare or Consumer Discretionary?
No urgency on the answer required.
Thanks,
Jim

Q: Hi there, which of the two stocks do you believe would have greater long term upside? I would be looking at at longterm hold (ie: 5+ years). Thank you!!