Q: Could you provide your opinion on Tornado Infrastructure. Although it is a small cap, is it managed well, does it have a bright future if infrastructure spending does ramp up?
Thanks
Thanks
5i Research Answer:
It is a solid little company, in our view, and shares are showing very good momentum. It recently did an acquisition which looks good. There is some cyclical risk here, but management has handled cycles well. The balance sheet is decent, though debt does increase with the acquisition. Strong earnings growth is expected in the next two years (40%+). Valuation is OK at 17X earnings, considering its growth rate. Insiders own 30%. There is a lot to like here, and yes, infrastructure spending could provide a tailwind.