Q: I try and invest in companies that have the potential to become long-term compounders and then hang on tight for many years. TIXT has pooped the bed, but going forward, do you think that TIXT is likely to become a long-term compounder? Is this the vision of their management?
Thanks.
Thanks.
5i Research Answer:
Management has lofty goals, and expects growth. However, to date, we do not really seen their competitive advantage yet. The stock is cheap, and thus could still do well even with just a valuation change, but revenue and earnings growth are slow enough, to imply, at least for now, not a lot of compounding potential. We would just watch it for a while and would be more interested even at higher prices once it has proven itself more.