Opinions
Rick Stuchberry
CI Financial Corp
CIX-T
DON'T BUY
Jul 18, 2018
Stock price when the opinion was issued
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Premium contentWe reiterate this wealth manager of $395 billion of assets as a TOP PICK. I has closed on the 20% divestment of its US wealth business, which as allowed it repurchase over $700 million of its debentures. It trades at 1.6x book and 6x earnings. It pays a good dividend with a payout ratio of 1/3 of its cash flow. We continue to recommend a stop at $12, looking to achieve $18 -- upside potential of 18%. Yield 4.9%
(Analysts’ price target is $18.94)Premium contentPremium contentOur PAST TOP PICK with CIX has triggered its stop at $13.50. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 12%, when combined with our previous recommendations.
Aggressive acquisition hunt for the last decade. Tough to be an independent in Canada, as Canadian banks control so much of net worth. He'd rather own the banks with their broader diversification. Warren Buffet says "A lousy industry will beat great management every time."
Building US business dramatically, planning to take public sometime in the future. Canadian side is well run, but the mutual funds business hasn't grown in years, perhaps 10% a year. Big dividend. Combining both sides of the business should garner a $35 stock price easily, $50 if they really tried. Yield is 4.6%.
(Analysts’ price target is $19.25)
He owns this personally. It's a portfolio manager, not insurance. They've stumbled a bit after buying some new assets. The Century deal is probably clearing. The yield is probably safe. But it's disappointed. It was $38 five years ago and been on a tobboggan run ever since.