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BRP Inc. Subordinate Voting Shares (DOO $101.35)
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ADF Group Inc. Subordinate Voting Shares (DRX $9.34)
I’m revisiting my portfolio. Would you be kind enough to review DOO and DRX. Not so popular stocks these days but considering adding to both. Thanks.
DOO released a strategic plan in October that emphasizes innovation in EV offerings and the stock has recovered nicely since April of last year, but it has been correcting recently. It is cyclical though, and it has not yet made a new high since 2023. It pays a small yield of 1.0% growth has been slowing, and margins have been slipping. Forward estimates are slowly rising though, and we think if management can continue to execute, it could eventually see new highs, but we are somewhat cautious given its cyclical nature.
DRX has been slowly recovering from its decline into April of last year, sales growth is quite volatile, but margins have been expanding. It trades at a cheap valuation of 5.5X forward earnings, and the recent momentum is decent. It is a small-cap name, but we would be OK slowly averaging in and reassessing at each earnings result.