Opinions
Paul Gardner, CFA
StorageVault Canada
SVI-T
PAST TOP PICK
Nov 09, 2023
$4.610
Stock price when the opinion was issued
Transportation
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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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Weak last quarter, but recovering on renewed guidance for double-digit growth. Unique because of high barriers to entry. Very good at acquiring. Should do well in a recession. Cheap. Falls between industrial and multi-residential.