Q: In a recent reader's Q. about 13 companies ranked for long term growth ATS (a 5i "B" name) was ranked first and TIXT ("B+")last.
I am trying to understand if it was only the growth factor that compelled the ranking, or is there some other?
In a recent report you state TIXT " has a
12.6X forward P/E, which is significantly lower than its peers, at 24.9X on average." The report also states the stock trades at a significant discount to its many measures.
Kindly reconcile my confusion in your apparent rationale and also tell me which are the TIXT peers.
I am trying to understand if it was only the growth factor that compelled the ranking, or is there some other?
In a recent report you state TIXT " has a
12.6X forward P/E, which is significantly lower than its peers, at 24.9X on average." The report also states the stock trades at a significant discount to its many measures.
Kindly reconcile my confusion in your apparent rationale and also tell me which are the TIXT peers.
5i Research Answer:
We grade companies primarily based on a variety of quality metrics including growth prospects, competitive advantage in the industry, returns on capital, track record of operating history, leverage profile, etc.
When it comes to ranking, valuation is certainly one of the key factors to consider in our ranking, we rank companies based on the risk/rewards profile of companies considering their quality. As a good company can be a bad investment if investors overpay.
The group of companies that we consider TIXT’s peers consist of DND, DCBO, etc. as these companies fueled growth mainly through acquisitions strategies.