Power Corp (POW.TO)

Growing at 11% compounded. Trading at 11x PE for 2027. Good dividend, which tends to go up. NAV up 46% in Q4. More to go. He'd be adding.

Getting a bit pricey. Lots of great assets, with the insurance business being the engine. Great asset management business. Venture capital component. 

The US-Iran war triggered a major sector rotation. The insurance sector weakened and the RSI fell. He sold it when the war started. It has pulled back and is sideways. 

New management, stock's gaining a new lease on life, and market's rewarding that. One thing against it is its huge holding in a mutual fund company, when we don't know where the stock market's going to go from here. Its insurance holding still looks OK. 

No clue where growth is going to come from, but he's curious. Inclined to stay in the stock as market shows it some love.

It could be an uptrend since early 2024, but recently the chart looks weak. There's some danger. It's going down. It needs to base for a while, then rise before he would step in. 

Recent selloff. Perhaps as a breather after the "everything else" trade, or in sympathy with HOOD and crypto (exposure via Wealthsimple). That exposure can give another 30% upside over next 5 years (if HOOD really works). Organic growth and solid EPS growth. 12% growth rate. 

Very well run, long-term focus. Major asset is GWO, also owns IGM. The third leg of the stool is fintech and alternative investments, and amounts to less than 5% of total assets. You can buy more of a pure-play alternative asset manager out in the market (think BAM, KKR, or APO). PE is ~13.5x, a bit rich for this type of business. Nice dividend ~3.5%.

His preference is to own GWO, which he does.

Pullback is probably more related to the sector and not the company itself. It owns GWO and IGM, both very good cornerstone businesses. Invested in Wealthsimple, growing very quickly, could represent hidden value. In a way, it's hedged in case fintech Wealthsimple disrupts its legacy businesses. 

Very robust, 3-legged stool. Solid income, with visible runway of dividend growth. Pullback is buyable.

For upwards of a 20% position, he's generally comfortable holding in a long-term portfolio such as a TFSA. Especially if it's a stable, core anchor such as this name. Stock's had a great run over last 3-4 years, multiple's expanded from 9x PE to 12x. Doing everything right, but it is getting expensive.

He has been trimming, and you may want to do the same. Especially as there are no tax implications in a TFSA for selling. A 10-20% weighting in this name in a TFSA is appropriate.

Its main assets are GWO and IGM. Those are owned in a holding company called Power Financial. Then there's one level up, which is POW. When you go up to the holding company, the market always attributes a discount to them. That introduces a variable that you can't control, as the discount can widen or narrow.

With this stock, you're two levels removed from the operating assets. Similar to the Loblaw/George Weston setup. He prefers to get closer to the source, and the ideal asset in this mix is GWO, which he owns.

Insurance underperformed the last 6 months but looks interesting now. POW has risen to the top of the Canadian relative strength stocks, #1. POW is holding in while other sectors are cumbling.

He bought a lot of this 1.5 years ago. Since then, shares have run up. POW's main asset is Great-West Life, hitting the ball out of the park with their Enpower prodict. POW also owns Investors Group, also doing well. But the money has been made in POW. He has sold a lot of POW shares.

It is hard to ignore the strong momentum shares of POW have had. Trading at 11X forward earnings with results that continue to look strong, we would be fine with owning the name. Even if it starts to level out from here, the 3.6% yield doesn't hurt.
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It is hard to ignore the strong momentum shares of POW have had. Trading at 11X forward earnings with results that continue to look strong, we would be fine with owning the name. Even if it starts to level out from here, the 3.6% yield doesn't hurt.
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