Q: Power Corporation hit a low of $36 last summer, then climbed steadily for the most part since then to $53 now. What is the reason for the large climb in price?
Historically, the price has been much lower than $53. Over the last 10 years, the normal trading range has been $30 to $39. Has something fundamentally changed with this company to warrant the high current price?
I would like to buy POW for a 3 to 5-year hold but do not want to overpay if the current price is an outlier on the graph.
What would a reasonable entry price be?
Historically, the price has been much lower than $53. Over the last 10 years, the normal trading range has been $30 to $39. Has something fundamentally changed with this company to warrant the high current price?
I would like to buy POW for a 3 to 5-year hold but do not want to overpay if the current price is an outlier on the graph.
What would a reasonable entry price be?
5i Research Answer:
POW started to report better than expected numbers in mid 2024, and this was followed by several broke upgrades. Then, interest rates in Canada started to fall, boosting the whole financial sector. The company also raised its dividend in March. We have some additional comments posted today on the company's historical performance and valuation ranges. At 10X earnings with a solid 4.63% dividend we think it looks good for income investors plus some growth potential, in the low $51 range.