VBNK is one of a few digital banks in Canada, and its core business is purchasing loans and leases from point-of-sale lenders, providing immediate liquidity without directly interacting with the borrower. With its solid risk-mitigated model, sticky deposits, and innovative tech platform, we think VBNK is positioned for sustained profitability and potential valuation growth. We are initiating coverage at a B.

KXS continues to be a great long-term winner in the niche market of supply chain software. If KXS can manage to continue to grow organically by double digits while right-sizing the stock-based compensation as the company grows over time, the long-term growth story of KXS as a high-quality SaaS compounder will continue to be attractive. We are maintaining our rating at ‘B+’.

PSI continues to be an interesting opportunity for investors looking for exposure to energy equipment & service providers. The company continues to offer an attractive yield and has historically been effective in returning capital to shareholders. We are maintaining our rating at a B, but if the broader drilling conditions improve and the inclusion of IWS can be effective, there could be a capacity to upgrade PSI.