Latest Expert Opinions

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Opinion
Expert
COMMENT
COMMENT
October 4, 2017

Supplies physical foreign exchange. They’ve diversified into the payments business, which has caused a few headaches for them in the last few years. It is still not in profit mode. There was a lot of excitement last Sept/16, when they got their bank license, and it was thought they would take the Canadian market by storm. The reality is that it has been a tougher slog in the Canadian market. Incumbents were a little more resilient than what had been thought. Q3 had record revenues, but expenses were a little higher than expected. Expenses continue to grow. Sold his holdings this summer, largely on valuations. It is difficult to justify the stock given its outlook for growth and profitability.

Supplies physical foreign exchange. They’ve diversified into the payments business, which has caused a few headaches for them in the last few years. It is still not in profit mode. There was a lot of excitement last Sept/16, when they got their bank license, and it was thought they would take the Canadian market by storm. The reality is that it has been a tougher slog in the Canadian market. Incumbents were a little more resilient than what had been thought. Q3 had record revenues, but expenses were a little higher than expected. Expenses continue to grow. Sold his holdings this summer, largely on valuations. It is difficult to justify the stock given its outlook for growth and profitability.

Jerome Hass
Portfolio Manager, Lightwater Partners
Price
$25.430
Owned
No
WEAK BUY
WEAK BUY
October 4, 2017

Plugged his nose and bought this a year or 2 ago, because he has Short positions in the airline sector so is using Air Canada for hedging purposes. It had a phenomenal run this year. He would be cautious about adding to it. It should trade closer to its American peers, and is trading at a discount, so he does see some upside.

Air Canada (AC-T)
October 4, 2017

Plugged his nose and bought this a year or 2 ago, because he has Short positions in the airline sector so is using Air Canada for hedging purposes. It had a phenomenal run this year. He would be cautious about adding to it. It should trade closer to its American peers, and is trading at a discount, so he does see some upside.

Jerome Hass
Portfolio Manager, Lightwater Partners
Price
$26.050
Owned
Yes
COMMENT
COMMENT
October 4, 2017

Doesn’t know this company very well. They essentially supply equipment to semiconductor manufacturing companies. The risk is that there is a fair amount of cyclicality in the semiconductor industry. If you think the semiconductor industry is cyclical, then those that supply them would be even more cyclical.

Photon Control (PHO-T)
October 4, 2017

Doesn’t know this company very well. They essentially supply equipment to semiconductor manufacturing companies. The risk is that there is a fair amount of cyclicality in the semiconductor industry. If you think the semiconductor industry is cyclical, then those that supply them would be even more cyclical.

Jerome Hass
Portfolio Manager, Lightwater Partners
Price
$1.440
Owned
Unknown
HOLD
HOLD
October 4, 2017

A very steady business. Just built a new plant in Toronto. There is a potential for them to make an acquisition or to build a plant in Vancouver. His concern is that when they have built plants in the past, it’s taken time to fill the capacity of them. He is cautious. On top of that it has always been pricey as a stock. Hard to see where the upside is in terms of valuation. Dividend yield of 3.1%.

K-Bro Linen Inc (KBL-T)
October 4, 2017

A very steady business. Just built a new plant in Toronto. There is a potential for them to make an acquisition or to build a plant in Vancouver. His concern is that when they have built plants in the past, it’s taken time to fill the capacity of them. He is cautious. On top of that it has always been pricey as a stock. Hard to see where the upside is in terms of valuation. Dividend yield of 3.1%.

Jerome Hass
Portfolio Manager, Lightwater Partners
Price
$38.900
Owned
No
COMMENT
COMMENT
October 4, 2017

There has been a lot of negativity weighing on the common shares, and conversely, Canaccord (CF-T) seems to have done a lot better over the last 1.5 years, so people have often looked at the difference between the 2. Canaccord is more heavily weighted towards cannabis stocks, which have done very well. Also made an acquisition a year ago of First Energy, which hasn’t worked for them. In terms of Preferred B shares, which he owns, it gives a decent yield, and at some point, thinks GMP and its wealth management side could be a potential interest to a 3rd party. He would rather own the Preferred B then the common shares.

There has been a lot of negativity weighing on the common shares, and conversely, Canaccord (CF-T) seems to have done a lot better over the last 1.5 years, so people have often looked at the difference between the 2. Canaccord is more heavily weighted towards cannabis stocks, which have done very well. Also made an acquisition a year ago of First Energy, which hasn’t worked for them. In terms of Preferred B shares, which he owns, it gives a decent yield, and at some point, thinks GMP and its wealth management side could be a potential interest to a 3rd party. He would rather own the Preferred B then the common shares.

Jerome Hass
Portfolio Manager, Lightwater Partners
Price
$2.600
Owned
Yes
COMMENT
COMMENT
October 4, 2017

He is still very confident in this. In Oct /16 they announced a privatization plan, and hired Goldman Sachs to lead the process. Had set a guidance on privatization by the end of June/17. Shortly before that, they announced privatization had been delayed, so the share price sold off. Management still expects something to occur in the fall, and still remains positive. A very good business. The underlying capacity has actually grown over the last 1-1.5 years, so when they do re-start their lending, the capacity of the company will be something that will be taken into account by potential buyers. When they announced the delay, they also announced they were exploring opportunities with private debt funds, which is something that hadn’t been taken into account. 12% dividend yield is a red flag to investors, but the leverage of the company is 25%-30%, and management feels it should be closer to 70%. They will absolutely use their balance sheet to fund the dividend, and there is no way they will cut the dividend.

He is still very confident in this. In Oct /16 they announced a privatization plan, and hired Goldman Sachs to lead the process. Had set a guidance on privatization by the end of June/17. Shortly before that, they announced privatization had been delayed, so the share price sold off. Management still expects something to occur in the fall, and still remains positive. A very good business. The underlying capacity has actually grown over the last 1-1.5 years, so when they do re-start their lending, the capacity of the company will be something that will be taken into account by potential buyers. When they announced the delay, they also announced they were exploring opportunities with private debt funds, which is something that hadn’t been taken into account. 12% dividend yield is a red flag to investors, but the leverage of the company is 25%-30%, and management feels it should be closer to 70%. They will absolutely use their balance sheet to fund the dividend, and there is no way they will cut the dividend.

Jerome Hass
Portfolio Manager, Lightwater Partners
Price
$10.120
Owned
Yes
PAST TOP PICK
PAST TOP PICK
October 4, 2017

(A Top Pick July/16.) *Short* Up 74.69%. A lithium ion battery company. Made an acquisition in Germany, and the head of the company had to pay $250,000 to OSC over a disclosure that the OSC felt was a bit rosy. His analysis suggests this is worth significantly less then the current share price.

Electrovaya Inc. (EFL-T)
October 4, 2017

(A Top Pick July/16.) *Short* Up 74.69%. A lithium ion battery company. Made an acquisition in Germany, and the head of the company had to pay $250,000 to OSC over a disclosure that the OSC felt was a bit rosy. His analysis suggests this is worth significantly less then the current share price.

Jerome Hass
Portfolio Manager, Lightwater Partners
Price
$1.050
Owned
No