Q: Savaria has had a precipitous fall and only seems to be accelerating to the downside. I am still in the black having held it a long time but am questioning if something has fundamentally changed with the company, flagging it as a "sell"? It just dropped significantly after announcing the upcoming date for its quarterly results and I can't count the number of times I have seen this happen where when the results come out it appears to confirm that there was "leak" of inside information, we will see. (On that note, I figure if 5i was a listed company, it would be classed as having a "wide moat", because it seems like wherever you look there is a dearth of people, organizations and institutions with integrity these days).
5i Research Answer:
SIS missed earnings estimates last quarter, and its record in that regard is not great (missing 7 of the past 8 quarters). But, its stock doesn't tend to react violently to results (absolute move, on average, is 4.8%). We have no additional reasons to expect bad news, BUT.....it has been hurt by inflation in past quarters, and we have seen quite the overall general slowdown in many healthcare related companies. We certainly would not expect blow out numbers this week. But we also note net insider buying in the past six months, and based on consensus EPS is expected to show very good growth in 2024. We think the current valuation reflects the situation fairly well.