Q: Does this company appear to have any of the attributes of a LMN, TOI, or CSU? Do you foresee CTS copying their strategy of not offering further shares. Is it a good investment for a 5 year hold? Thanks
5i Research Answer:
While we consider CTS 'OK', in no way would we put it into the same camp as the CSU group of companies. For one, its share count has already tripled in the past four years. It is highly leveraged and we would not consider management to be nearly of the same quality. We are comfortable with the stock today, but mainly due to its very low valuation. We need to see some catalysts here, though, to make it a long term keeper. Ideally, we would like to see better growth, higher cash flow and lower leverage.