lundi 15 août 2016

The good, the good, the good, the good and the ugly

Let's take a look at some results released lately. I own these four stocks and I believe strongly in them.  They all beat expectations by at least 10% and they all have a good or great balance sheet. They all represent about 5% of my portfolio. Plus, there's an ugly stock that I'm ashamed of, because I've been a shareholder in the recent past. I've however sold everything without a monumental loss.

Tucows: The last results were great (EPS = 0,39$ VS 0,35$ expected). On the day of the release, the price of the stock went up something like 8-10%. Then, the next day, it went down the same percentage. And the following days, the price kept going down for no apparent reason. The actual price of the shares is lower than it was one month ago. Am I missing something? For me, it's one of the best picks in the market right now (ROE = 47 and forward PE = 16). However, the debt is growing to my limit of comfort (nothing alarming however). 

Hardwoods Distribution: Pretty good results once again (EPS = 0,32$ VS 0,29$ expected).
This is my lowest ROE stock (after Knight Therapeutics), but the performance is great and management seems pretty solid. They also made a big acquisition recently.

Knight Therapeutics: This one is harder to evaluate because this company is mainly a company full of cash, without a lot of earnings (the last results were 0,04$ EPS VS 0,03$ expected... for a stock priced at 8,20$). But their cash pile is pretty high. Sooner or later, they'll do something great with all that money.

Linamar: The last results were excellent (EPS = 2,39$ VS 2,16$ expected). I never understood why the price of the shares that was already pretty low went down something like 20% in the last months. The company achieved a ROE of 27 and the forward PE is about 9. It's a great pick. The margin of security is high here.


Concordia Healthcare: Oh my god. What a terrible stock and an even worse management. Mark Thompson is looking pretty bad with his suing of Marc Cohodes. Plus, many comments on stockhouse are saying that the last conference call was the worst they ever heard and Thompson looked on drugs (I didn't heard the CC because I'm not interested anymore in the company). Let's say that a loss of 11,18$ per share is an incredibly awful performance. Forget all that fucking shit about their adjusted  EPS of 1,38$. If that fucking business can transform an incredible loss in some earnings, Mastercard could transform their incredible earnings in some giga fucking earnings. Why great companies couldn't be as creative as bad companies?

Who fucking cares about imaginary money? That's all that fucking Concordia is able to earn: IMAGINARY MONEY. 

The summum of bullshit is their cut of the dividend because "the Company believes the dividend payments can be better deployed towards long-term value-creating initiatives or debt repayment."

I hope everybody is clever enough to understand how things are going badly in this company with such a move. They started the dividend when the business had way less earnings and now, they cut it even if their sales are supposed to be something like 100 billion percent higher than 3 years ago.

That management doesn't have any credibiliy anymore. I understand why Jason Donville keeps himself far from the cameras of BNN these days. He probably doesn't want to see his performance being exposed to viewers, particularly for such a crappy stock.

13 commentaires:

  1. It's true it's been a while since last time he was on BNN.

    He was on CNBC a few days ago

    He looking tired or different, maybe it's only because they forgot to put makeup or something.

  2. It's true that Linamar appear to be really cheap. Maybe the fears about the auto industry (free trades, labour cost and the cyclical nature of it) are overdone.

    I'll take a deeper look into this.

  3. I got burned on CXR. I am still keeping it and will have to stick with the company for a while. At least cash flow seemed to be alright and positive. Who knew they would write off their own intangibles during the interim period which wasn't even audited? Auditor did not pressure them to write it off then who? Only logical conclusition is the CFO. He probably fought off with the management team to write it off thus ending up thrown off the bus.

  4. Linamar was a good cash cow for me. Added $10K after Brexit and it is up by around $3K now. Funny thing is it still looks cheap.

    I was puzzled when Tucows dropped by like 10% after going up like 8-10%. The result seemed amazing. Their debt is low but the deferred revenue (i.e. cash has been received but service hasn't been performed) is high due to their nature of business. I will probably pull the trigger soon.

    I am also looking at Logistec and Stantec after their disappointing earnings. What do you think about them?

    1. Don't really like Stantec. Average business in my opinion but I know that some people like it a lot.

      I sold my Logistec after the last results that were bad. I don't see how this company could go well in the short term.

    2. I see. Thanks Penetrator. What about Photon Control? Good ROE, increasing revenue, EPS and cash flow. Is it too small for your portfolio?

      Anything else that you are keeping your eyes on other than the four that you mentioned above? Are you adding more on Tucows?

    3. I prefer Ceapro on the Venture but PHO seems good. However, I don't have any intention of investing in two venture's stocks.

      Anything else I'm watching? I'm always watching about 200 stocks via my Iphone. Bought some Linamar recently and I believe that Hardwoods Distribution is still a good buy.

    4. Ceapro is quite incredible if they can continue the growth. As you said, I am a bit hesitant to invest in ventures. PHO seems great but I still cannot convince myself yet.

  5. What are your thoughts on Western Union?

    1. Not interested in that sector. Money movement is affected a lot by technology.

  6. I have already warned your readers that if they invest in concordia they will be squashed like bugs. So, I'd like to address Photon Control (mentioned above). The financials look great. Low p/e, very good roe, etc. My problem with them is that upper management seems to enjoy using the company as their piggy bank. They have some creative angles. The president set aside a separate company that he owns to do PHO's research and development. So, he's sucking off millions to subcontract R&D to his private firm. Eventually, there was a scandal over this. PHO also pays their employees in a unique way. They are very big on paying much of the salary in stock options. Isn't that special? YOU get to pay for much of the company's payroll through non-stop dilution. All companies issue stock options. PHO makes it a huge part of the employees' overall compensation.

    To sum up, when great financial metrics come with a management that appears somewhat shady or overly greedy, I tend to pass. You may still get rich with PHO. I will pass.

  7. Good insight. Outside of gold, is there anything you've been adding to the portfolio or thinking of adding? Thoughts on Tucows?

    1. Photon just released earnings and the stock is down 15%. I guess my warning was timely.
      I have thought of adding Tucows to my portfolio. I just wish I had more information about them. I do want to diversify away from gold because it's very easy for the puppet masters (biggest banks and investment banks) to manipulate the price of gold with derivatives.