How does the future look for this company. I believe they are in the right space based on our consumeristic habits.
Thinking of putting in my TFSA.
Thanks very much
SVI is now up 5%YTD, but down 19% over one year. It has lost money since 2017, and more losses are expected, which can hold off investor interest. Debt remains the big concern here, at $2B, considering cash flow of barely $100M annually. After a huge acquisition run, it was much quieter on deals over the past year and this may slow down expected growth in the short term. Still, we are comfortable with its overall roll-up strategy. The sector is filled with mom-and-pop operators just waiting to be consolidated. Being public gives it a cost of capital advantage. But there are risks other than the debt. We think management knows what they are doing, and are committed through ownership. But there is not really a 'moat' here until the company has a dominant market share. The debt makes it hard to really like, as in a recession and/or spike in interest rates the debt will be a burden. Revenue missed estimates last quarter. With its debt risk, we would just give it an 'OK' rating and cannot fully endorse it.