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  5. PSI: I bought a large amount of PSI because it’s listed in a 5i model. [Pason Systems Inc.]
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Investment Q&A

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Q: I bought a large amount of PSI because it’s listed in a 5i model. I don’t follow Canadian markets, so I buy 5i-recommended Canadian businesses without much checking. PSI shares have only sunk in value. Why is PSI in your model (other than for dividend) ? Is it worth holding ? Is it an attractive takeover target ?

My question (admittedly a leading question from one who is weary of these losses in tax-deferred accounts): is it not better to shoot this thing and be done with it? You are still holding PSI which makes me think I must be wrong. Am I ?

Is PSI's *business model* viable, really sustainable ?

Sometimes a business I hold does nothing for long periods and just sits idle, or still. Then, suddenly it jumps like a rabbit, and the share price jumps and away we go. A forced metaphor perhaps but intended to to illustrate the sell-indecision. BNS is an example of such ‘rabbit’ — but it’s only after years that I am finally now breaking even, showing a small loss. The long wait is often not worth the opportunity costs.
I am baffled why PSI is favored at 5i.
:ao:
Asked by Adam on September 04, 2025
5i Research Answer:

For the model portfolio we were (are) attracted to the high dividend, supported by strong cash flow and a net $44M cash position on the balance sheet. We also wanted a bit more representation in the energy sector (direct, vs companies such as ENB). It is not our favourite stock in the model, and the weighting is low. But the sector, when it moves, can move big at times. Valuation is low and sentiment getting lower. Any good news could see an amplified positive impact. PSI's data business is capital light and data can be resold multiple times. We would consider it a takeover target. Its small size also may be an impediment to big gains in the current environment. So, we might not expect huge gains, and for a non-income investor we don't think it is a need-to-own stock. But for the model it offers a solid yield and an attractive valuation, in a small weighting. We are willing to show some patience with the sector. The dividend was cut in the dark days of 2020 but has more than doubled since then.