Hang in ThereLargo Inc. (LGO), Sangoma Technologies Corporation (STC), Questor Technology Inc. (QST), CES Energy Solutions Corp. (CEU), WELL Health Technologies Corp. (WELL), Palantir Technologies Inc. Class A (PLTR) Jul 13, 2023 I am doing a portfolio clean up in my wife's RRSP and these companies are all down. Please provide comments on whether to add, keep, or sell and your suggested order for selling if required. Largo (LGO), Palantir (PLTR), Questor (QST), Relic (RHT), Sangoma (STC). LGO is cheap, and growing again, but its margins are quite thin and currently unprofitable, and it mostly issues debt to fund its operations. It has a decent balance sheet, but estimates for sales and earnings are mixed over the coming years, and the stock has not participated in this year's rally - we think investors can move on.
PLTR has shown solid growth over the years, is a large name ($36B market cap), has very little debt, a good cash balance, but its valuation is quite expensive and it is not profitable. It operates in the AI space, and the tailwinds from that should help it out. We think it is OK, but pricey. We would be OK holding this name for now.
QST is small ($25M market cap), but has shown good growth, a decent cash balance, no long-term debt, and a good management team. Due to its size and unprofitability, we would prefer a name like CEU within the same industry.
RHT is expected to grow sales and earnings nicely, it trades at an OK valuation of 4.5X forward sales, but it continues to generate negative free cash flows and while it may increase in share price, we would be more comfortable with a name like WELL here.
We have STC in the growth model portfolio, and its recent quarter was decent and forward growth estimates are decent. Its valuation is cheap and it generates positive free cash flow. We would consider STC a hold here.
In order of priority for selling we would rank: QST, LGO, and RHT (5iResearch)