Colliers International Gr (CIGI.TO)

Insider buying is a strong signal. Likes the set-up here. The strong data centre build is very net positive for commercial real estate for years to come.

It sold off 25% over 4 days in February over fears that AI will replace human brokers. This is laughable. The CEO-chair bought $16 million of shares during that share, then bought another $29 million more. The company is expected to earn record EPS ever, yet shares are trading at its 50-year baseline. The share price is detached from fundamentals.

Everyone knows it for its real estate business. Based in Toronto, but global. Asset management business south of the border, but it's not commercial real estate. 

Its third arm is engineering services. Buying lots of smaller engineering companies. This division looking to double revenue in next 5 years. 

Management's great. Believes CEO just purchased a bunch more stock. Growthy name. Yield is 0.26%.

It has also been affected by the AI scare in that AI could replace human agents. However the business is driven by relationships and the trust factor is important. When it comes time to sign the deal, people wants humans, not AI. This will continue to be a human to human business.
Buy 8  Hold 4  Sell 0

Pummeled on fears of AI disruption and interest rates not coming down as fast as expected. Recent acquisition increased leverage (he sees that at 2x by 2027), and market fears debt issuance. Thinks recent acquisition looks accretive by 3%. 

Company states that its complex transactions can't possibly be outsourced to AI. Organic growth of 5-6%, plus 10% from acquisitions. Internal ownership is tight at 30%. Rate cuts would help. Secular play of growing urbanization, infrastructure, energy transition, and globalization. 

Sees 15% growth at 14x PE. Yield is 0.26%.

Has long owned this. Run by a great CEO. Not just real estate, but CIGI is into engineering and asset management. They buy companies and do well tucking them in. They are buying an engineering company. Is volatile, but a great compounder over time.

There's still upside. CIGI has benefited from rate cuts, since CIGI is in real estate. Peer CBRE announced strong results two weeks including double-digit revenue growth. There seems to be pent-up demand in the market. They use economic downturns not only to buy companies, but hire top talent. They have a record number of commercial RE brokers and agents.

A turnaround. Building recurring income. Owned since 1988. Great company. Hiccup last couple of years with real estate, rest is going well.

Globally diversified, with 50% of revenue from US. Profitability is 20% ROE, considerably higher than market average of 12% in Canada, and US average of 14%. More leverage than he's comfortable with. Share price has moved sideways for a couple of years. Virtually no yield, so you need capital appreciation to create alpha. 20x PE, quite expensive for a real estate company. He'd be interested around $120.

Real estate has been impacted heavily by higher interest rates. Office RE has been hit the most as there remains vacancies in offices. But if you feel that rates will decline (likely), CIGI will do better. If you like this name, buy a little now then wait 1-4 quarters and watch rates before adding more.

Getting into real estate investment management, a pretty good business. Leasing and brokerage and office are not good right now. Hard to get people to come in to work. Trying to diversify. Trusts the CEO. Prefers FSV.

It grows organically and by acquisition but when buying another company it leaves 25% of the shares in the hands of existing management which motivates them to make it work. It is the fastest growing global commercial real estate services company.