Q: May I have your thoughts about SVI?
5i Research Answer:
SVI is continuing with its roll-up strategy, though its pace of acquisitions has slowed. Debt is VERY high and this may limit deals. Debt is more than 20x annual cash flow right now. Revenue and cash flow growth are good, but the company is still losing money on a new basis. Insiders own 3% directly and 38% through Access Self Storage. It keeps increasing its dividend but yield is minimal at 0.29%. We think its strategy is fine, and the sector is ripe for consolidation still. But its small size and balance sheet risk make it less attractive overall.