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  5. CTS: Thoughts on these 3 companies going forward? [Converge Technology Solutions Corp.]
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Investment Q&A

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Q: Thoughts on these 3 companies going forward?

Thanks!

Asked by Bruce on November 09, 2021
5i Research Answer:

We like CTS's growth prospects and think the valuation at 30.4x earnings and 1.2x sales is attractive given the level of growth expected. Shares are seeing a recovery and good momentum and we would be buyers today. Shares can be volatile however, so we would watch position sizing. QIPT has done well to strengthen its balance sheet and is showing decent growth. Its recent listing on the Nasdaq is positive and the valuation is very attractive at 17x earnings and 1.4x sales and we like that is has been free cash flow positive over the last few years. However, it is a smaller name which adds risks and shares have been seeing weakness and we would wait for things to settle a bit. STC has done really well with a strong track record of growth. Since 2015 the company has shown double-digit (and in 2018 triple digit) growth on the top line. Cash flow growth has been solid and we expect good growth to continue. We would be buyers today.