Q: Good Afternoon,
I am thinking of buying Cascades. But, it's seems to be in a downward spiral lately. What seems to be the issues driving the stock price down? Would you consider it a buy, hold or a sell?
Thanks for your great service.
Jane
I am thinking of buying Cascades. But, it's seems to be in a downward spiral lately. What seems to be the issues driving the stock price down? Would you consider it a buy, hold or a sell?
Thanks for your great service.
Jane
5i Research Answer:
CAS is cheap at 9x earnings and offers a nice dividend. But there are things holding it back. Debt is VERY high, at $1.9B it is more than 4x cash flow. Earnings are not expected to rise this year (based on consensus estimates). And, tarifffs continue to hurt both demand and investor sentiment. We would consider it fairly risky at this time, and a weak hold. That being said said, cyclical stocks are doing better, and a shift in tariffs or sentiment could still move the stock higher.