Stockchase Insights

We think LSPD remains a sell. We have some previous comments posted, but it has had enough 'chances' and was also unable to sell the company. 
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DOCS has erased earlier gains from its last earnings report, amid the market drawdown, but it continues to be on a long-term uptrend, and forward sales and earnings estimates are strong. Analyst estimates have been trending higher in the past year, margins have been expanding, and it generates decent cash flows. It has a good balance sheet, but it is not cheap at 38X forward earnings. For a long-term investor, we would be comfortable holding here given its fundamental strength. 
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CCO has had three broker target price downgrades in April. In addition, the uranium sector has been weak as investors consider whether Russian exports will be allowed to resume if there is some resolution to the Ukraine War.
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Multiples Needed to Breakeven from Drawdowns

One of the most often misunderstood concepts in investing is the difference in percentages from a drawdown against an increase. For example, if a stock declines by 10%, a subsequent increase of 10% will not bring the investor back to breakeven, but rather an 11% increase in the price is required to break even. For example, a $10 stock declines by 10% to $9, a subsequent 10% rise from $9 brings the stock up to only $9.9. Below we have listed various drawdown percentages in increments of 10%, and the subsequent percentage increases needed to break even, along with their respective ‘multiples. For example, a 90% drawdown in the price of a $10 stock requires a 10X to bring the stock back up to $10. 
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In the current market it is hard to determine how much of the recent drop was China related, or market related. It is not good news, and the stock is down 24% YTD. It is also, of course, sensitive to the economy, which has gone from hot to cool to maybe cold. Good earnings growth is expected based on estimates, and even if this comes down a bit there should still be some earnings growth. We think it is cheap enough to hold through the current cycle. It may stay volatile in the short term, along with pretty much everything else. 
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We continue to like STN, but at the time we felt its valuation was lofty relative to its historical averages, and we were looking for higher growth opportunities elsewhere. We think it is a solid moderate growth name, and for a long-term investor, we would be comfortable holding it over the long term. It can go down along with the market if we continue to see declines for the TSX, but it has a strong history of margin expansion, revenue growth, and free cash flow growth.
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The Nasdaq 100 is currently down about 22%, and was down as much as 25%. While the markets could decline further, and it is tough to time bottoms, there have been many positive signals that have been triggered recently. For example: the VIX has spiked, most markets are in bear market territory, valuations have become more reasonable, certain markets are breaking down (oil, bonds, the credit markets). These usually signal good long-term buying opportunities, but there is likely to be a lot of volatility in between, and potential further downside. We would comfortable buying here today.
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Saving on Fees:

We’ve heard it a million times before, but even deceptively small fees have a massive negative impact on wealth. Investing $100k at seven per cent for 35 years will result in a tidy nest egg of almost $1.1 million. Tacking on an annual two per cent fee might not sound like much but would effectively cut your final balance in half. Financial services represent a 63 billion dollar industry in Canada—63 billion dollars from fees of various forms. There are a lot of well-meaning people working in it, but the fact is that the industry is built upon increasing their wealth, not yours. Saving fees by investing your own money might be the most important financial decision you can make. 
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We would not see a rush, but we would be OK buying a partial position (1/5th or so) into any further weakness. It may take a while for things to recover. We think over three years it will be higher, but the short term outlook is much harder to call. 
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LNR is in the same boat (same car?) as Magna. It is also very cheap though. It has some European business ($2.8B) which insulates it a bit from the US trade war. The balance sheet is fine and it will get through this crisis, but we would not expect much from it this year. 
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Economic risks have increased, perhaps a lot, and this can impact banks. We generally do not like averaging down but are more comfortable with the strategy when 'everything' is down. We would be cautious on sizing as it is a smaller company, but at 8X earnings and a dividend that was increased in February we would be comfortable buying some into the current weakness.
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Trying to Time the Market is a Fool's Errand

There is a reason that trying to time market bottoms and tops are what most would call a ‘fool’s errand’, and this is mostly because market bottoms and tops are exclusively obvious in hindsight, but also because it goes against our basic human nature. When the markets are declining day after day, and there is seemingly no end in sight, our instincts are to assume that this trend will continue and fear that the markets will not recover for quite some time. On the contrary, when markets are rising day after day, it is easy to believe that this trend will continue and human emotions stoke a fear that selling at those levels would be ‘too early’. Calling the winter market top of 2021 is now obvious in hindsight – inflation was picking up and the Fed was preparing for higher rates and reduced liquidity, but yet most investors chose not to sell – why? We believe that it is because most investors believed that the markets would continue their climb higher, as was the case in the latter part of 2020 and throughout 2021. Investors’ fear of selling at that point and regretting selling too early was high. 
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WCC is a $7.8B business-to-business distribution, logistics services, and supply chain solutions company, which was originally founded in 1922. It mostly offers solutions to the construction, industrial, and OEM markets, as well as network infrastructure, security, and utility services. It pays a small 1.1% yield but it has a nice buyback program in place, sales growth has been strong over the years, but fairly volatile, and margins have expanded nicely. It generates strong cash flows and trades at an attractive valuation of 11.7X forward P/E. We think it looks interesting, but growth prospects over the next couple of years are somewhat muted. The leadership team is strong and given the company's extensive history, we are comfortable with the management team.
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We are quite shocked, frankly. 'Everybody' turned negative on CRWV in the weeks before it went public, and then it landed with a thud and a dud. Then, it goes up 41% yesterday. The float is quite thin, and some shareholders cannot sell for 180 days, and this can increase volatility. ARK Funds were buying this week. There was no news yesterday, but options are now listed on the stock and we expect it to be a popular stock with the retail/meme trading crowd. The big jump does not mean all is clear in the data centre space, but it is of course encouraging. Another example of how sentiment can swing wildly. We would still prefer the other data centre companies but it is one to watch. There are risks here, but also opportunities. 
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Analysts tend to be conservative. It is a pretty solid, high-paying job, and they do not get much benefit from 'sticking their neck out' versus the crowd. Target prices and recommendations tend to be similar. They do not get fired if 'everyone else was also wrong' but if they are an outlier then their calls are more closely scrutinized. AT 19X earnings FTS still looks OK to us, and its positive momentum in a bad market we think is a strong sign as well. But, it is up 28% in a year, and we would not expect those types of returns on a regular basis. It is still a relatively slow-growth utility company. 
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