
Rockets and Duds: Week 9 - Feb 10, 2025
5i Research Weekly Rockets and Duds Welcome to week nine of 5i Research's market ROCKETS...
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5i Research Weekly Rockets and Duds Welcome to week nine of 5i Research's market ROCKETS...
Weekly stock market update & five stock related articles we thought were a must-read this week
TSX Weekly Wrap - Friday February 7, 2025 Canadian Unemployment rate 6.6% vs....
BPF.UN remains a cheap name for capital-light income-seeking investors but with limited growth prospects, as BPF.UN is a mature business that focuses on generating sustainable yield rather than growth. That being said, there is an upside optionality for a strategic acquisition that is not priced in yet, which recently happened with one of its peers – A&W Corporation. BPF.UN is an interesting high-yield name for income-seeking investors, which becomes even more appealing amid a declining interest rate environment. Overall, BPF.UN’s operating results have not shown tremendous improvement yet. BPF.UN is still an attractive royalty income play with some “upside optionality”, either as a target acquisition or from operational improvement. We will maintain our rating at “B-“ for now but will remain open to a downgrade if operating results do not improve.
We continue to see TIH as a high-quality industrial name with a shareholder-friendly policy through a combination of progressive dividend history and occasional share buyback. TIH managed to compound shareholder capital at around 17% per year on average (dividend included) over the last 30 years, which indicates the longevity and sustainability of the business model. TIH is trading at a fair valuation, which should do well over the near term as the industry cycle turns. We are maintaining our rating at “B+”.
CAE continues to offer investors unique industrials exposure. The company’s market leadership, providing a very specialized offering makes it an attractive opportunity. In its most recent quarter, CAE’s reputation and ability to win contracts was on display with significant order intake across both its segments. While there are some near-term headwinds that may affect growth in Civil Aviation,
the long-term story there is still positive, while the Defense segment has numerous tailwinds. As things stand, we think it is trading at a fair multiple and will need to see further growth and margin improvements to warrant any further multiple expansion. We are maintaining our rating of a B+.
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