Q: What is 5i’s opinion on this company. I’m underwater. Should I unload. It seems to go nowhere, a bit like the Pittsburgh Steelers recently.
Thanks for your advice.
Thanks for your advice.
5i Research Answer:
IFP did a large acquisition a few years ago that put the company in a weak financial position with high leverage, and although debt has been reduced gradually, the net debt/EBITDA is still at 4.7x, which is high for a cyclical company.
IFP is trading at only 0.3x Price/Book; a lot of bad news is priced in because of weak lumber prices, tariffs, and potential risk caused by high leverage (dilution or even worse, insolvency). We think investors are better off putting capital to work elsewhere with a more attractive risk/reward.