John Zechner Telus International Inc. TIXT-T BUY Jun 28, 2024

We removed TIXT from the growth model portfolio on October 10th as the drop in demand from some of its larger clients is concerning. Execution has not been great, and its debt levels are growing fast. ATS is roughly double the size of TIXT ($3.7B vs. $1.9B, respectively), and its forward growth rates are anticipated to be better than TIXT. Fundamentally, ATS is a better name than TIXT, but this is reflected in its higher valuation (18.6X forward earnings vs. TIXT at 7X forward earnings). For a higher quality company and a long-term investment horizon, we would be comfortable with a switch to ATS today. 
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It's gotten cheap with overdone selling. The valuation is in line with peers. Likes the Telus stocks.

Spun out from Telus. Call centres and support centres for other businesses. No competitive moat, business economics not phenomenal. Avoid.

Lots of telecom companies are capital intensive, takes a long time to get its money out, never mind the shareholders getting their money out. Very competitive business. Not for a growth portfolio. No dividend.

Stock has been range bound lately - interest rates putting pressure on stock price. Expecting a double bottom going forward. Potential for strength going forward, but will need interest rates to fall. 

Suspects business will be great. Energy prices, and population growth in Western Canada will ensure strength of this business. Would recommend buying this business compared to BCE. Strong management team with legacy assets. 

Sell it. Take the loss and re-deploy capital. Don't catch a falling knife.

Risky debt position causing financial strain. Needs to see improved profitability and significantly reduced debt. Exit, and see what the future holds.

IT services and support style business model. Company not performing well in the markets. Debt also a concern. Would not recommend investing.