Q: Held this stock for quite a while in my wife's TFSA. It has done nothing. I am thinking of selling and buying something else? Comments please.
5i Research Answer:
TSU has been under pressure over the years due to its asset impairment from a couple years ago, as well as recently a hardening insurance market. The stock has largely traded sideways for a few years, but it trades at a decent valuation of 12X forward earnings. We think it has potential to turn around and become a growth story again, but it has been quite weak for a while. For an investor seeking a larger, more stable insurance name, we would be comfortable with a switch to the much larger SLF or IFC, but if an investor is looking for a small-cap, Canadian specialty insurer that has the potential to see strong earnings growth, we would still be comfortable holding TSU here.