Q: Hello, I'm wondering your current thoughts on good industrials, Canadian or otherwise. I have already done well with WSP.
What is your current opinion on TFII? As a sector leader it looks like an ideal buy opportunity for those with patience. Any other suggestions would be appreciated as well.
What is your current opinion on TFII? As a sector leader it looks like an ideal buy opportunity for those with patience. Any other suggestions would be appreciated as well.
5i Research Answer:
TFII may have a rough year, but we think this is starting to be reflected in valuation. The stock is down 38% YTD and sentiment is low. But it has bounced nearly 20% in a month, and this is not its first downturn. It indicated last quarter that it had almost made a large acquisition, which is its typical strategy in downturns. It has recovered well from other recessions and we would expect the same this time around, but of course can't time this perfectly. We would be comfortable with some exposure for patient investors, but we do think bigger buying can wait. We like RUS here, a bit more for income than growth, but it is holding up well. CNR is another one that should rise from the ashes. STN we like, but it is very similar to WSP.