Q: I note that riocan is currently on an uptrend. Any reasons for this that you can see? If it were in the income portion of your portfolio, would you continue to hold it? Do you see any headwinds or tailwinds for its stock price over the next, say, 12 months? Thanks for your opinion, J
5i Research Answer:
REI.UN is up 30% now in a year. Its Q1 earnings were OK, and it has received a couple of broker target price hikes post-earnings. Interest income was higher than expected and it swung from a loss to a profit. We see no other recent notable news. The sector has acted better, and with a weak Canadian economy interest rates may continue to slowly move lower. It remains quite cheap at 11x cash flow which is likely attracting some interest.