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  5. GDI: What are your thoughts on GDI? [GDI Integrated Facility Services Inc. Subordinate Voting Shares]
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Investment Q&A

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Q: What are your thoughts on GDI? I know you still hold it in your growth portfolio but the stock has pretty much traded in a flat range for the last 2.5 years. Up 32% but only around a 1% position. I'm patient but thinking of selling and adding to other names with more growth potential, names like LMN, KXS, ATZ, CROX, WELL, NVEI, TOI, SHOP, etc.... What are the catalysts to move this stock and what do you still like/dislike about the fundamentals? Thanks!
Asked by Keith on May 30, 2023
5i Research Answer:

We like all of the names mentioned and believe as a group, they could perform quite well against the market. As for GDI, although the share price has gone mostly flat in the last few years, the EV/EBITDA multiple has gone down from 15x in 2019 to 10.3x today. We still like the name, we think the company operates in a stable, predictable industry, and has a track record of doing acquisitions and creating value for shareholders through EBITDA growth. We think the company is trading cheap relative to historical averages and fundamentals, and we would still be comfortable holding at this price. As for catalysts, it does have a stock buyback in place, and it has been very quiet on the acquisition front. It has not done a deal since Jan 2022. We think (besides earnings, growth) some M&A activity might be the key to spark some more interest.