Opinions
Andrew Moffs
StorageVault Canada
SVI-T
HOLD
Sep 27, 2023
$4.470
Stock price when the opinion was issued
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
SVI operates in a structure relatively similar to a REIT but is much more growth-focussed. It needs to utilize debt in order to be able to grow its portfolio of assets which it rents out. It has also grown primarily via acquisition. The rising rate environment has created cost pressures, however we do think the outlook is positive. As Canada has already begun cutting rates, we think SVI stands to benefit from lower interest expenses (bottom-line expansion) and being able to isse more debt to finance growth (top line expansion). The industry is capital intensive so while high debt is a risk, it is somewhat unavoidable. We like the outlook for SVI.
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Great sector, recession resilient, flourishes with life's disasters. Largest operator in Canada. Internal growth 4-6% range, which he thinks is pretty good for a defensive asset class, but the market's less excited. Underperformed this year. Growing cashflow environment.