Q: What are your thoughts on continuing to hold BBD.A now that it is finally showing some performance. (after a stock split and many years under water)
Thank you.
Thank you.
5i Research Answer:
BBD has benefited from the 'defense' trade, and its 100% gain this year has brought valuation to 22X earnings. Decent growth is expected, and momentum is solid here. However, we just can't get our head around the leverage. Debt is more than 10X cash flow. The history of the company of course is not great. While we have no reason to be particularly concerned in the short term, we still would not see it as a need-to-own type of stock.