Exchange Income

EIF-T

Analysis and Opinions about EIF-T

Signal
Opinion
Expert
BUY
BUY
December 6, 2017

Regional planes and aftermarket parts distribution. He likes the business. It’s been under pressure from a Short seller making comments about using debt to pay the dividend. He is not convinced. They’ve been fairly active doing acquisitions, and he looks at the debt as being for acquisitions. Trading at a reasonable valuation at about 16X, and pays a great dividend of almost 6%. He is buying for new clients.

Exchange Income (EIF-T)
December 6, 2017

Regional planes and aftermarket parts distribution. He likes the business. It’s been under pressure from a Short seller making comments about using debt to pay the dividend. He is not convinced. They’ve been fairly active doing acquisitions, and he looks at the debt as being for acquisitions. Trading at a reasonable valuation at about 16X, and pays a great dividend of almost 6%. He is buying for new clients.

Kash Pashootan
CEO & Chief Investment Officer, First Avenue Investment Counsel
Price
$36.520
Owned
Yes
DON'T BUY
DON'T BUY
November 16, 2017

(Market Call Minute.) There are Short reports out there, and he is trying to get his head around as to whether the Shorts have nailed this or not. There are some concerning signals. He would hold off on this.

Exchange Income (EIF-T)
November 16, 2017

(Market Call Minute.) There are Short reports out there, and he is trying to get his head around as to whether the Shorts have nailed this or not. There are some concerning signals. He would hold off on this.

Alex Ruus
Portfolio Manager, Arrow Capital Management
Price
$34.820
Owned
Unknown
TOP PICK
TOP PICK
October 25, 2017

This has gotten beaten up over the last 6-12 months. A short seller report came out questioning what they need to spend on some of the CapX on their airlines, as well as if dividends are sustainable. The company came out with good earnings which solidified their dividends. The stock rebounded up to around $34-$35, but has now come back down to around the $30 mark for no rhyme or reason. (Analysts’ price target is $42.)

Exchange Income (EIF-T)
October 25, 2017

This has gotten beaten up over the last 6-12 months. A short seller report came out questioning what they need to spend on some of the CapX on their airlines, as well as if dividends are sustainable. The company came out with good earnings which solidified their dividends. The stock rebounded up to around $34-$35, but has now come back down to around the $30 mark for no rhyme or reason. (Analysts’ price target is $42.)

Cole Kachur
Senior Wealth Advisor, ScotiaWealth Management
Price
$32.010
Owned
Yes
COMMENT
COMMENT
September 28, 2017

A kind of illiquid stock that moves around a lot. There is a Short Seller piece out there that says they are not going to have enough free cash to meet their dividend. CapX has been elevated. Thinks the Short Sellers are wrong and that they are going to grow their earnings by 12% over the next couple of years compounded annually. He models a payout ratio of 96% for 2017 next year. Thinks you will get a good combination of dividend and upside from here. Dividend yield of 6%+.

Exchange Income (EIF-T)
September 28, 2017

A kind of illiquid stock that moves around a lot. There is a Short Seller piece out there that says they are not going to have enough free cash to meet their dividend. CapX has been elevated. Thinks the Short Sellers are wrong and that they are going to grow their earnings by 12% over the next couple of years compounded annually. He models a payout ratio of 96% for 2017 next year. Thinks you will get a good combination of dividend and upside from here. Dividend yield of 6%+.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$34.750
Owned
Yes
BUY
BUY
July 24, 2017

It is still a buy. It is a really good company back to 2005. They have almost always had 10% or more return on capital.

It is still a buy. It is a really good company back to 2005. They have almost always had 10% or more return on capital.

Matt Kacur
President, FSA Financial Science and Art
Price
$27.050
Owned
Unknown
COMMENT
COMMENT
July 6, 2017

This had a Short report issued on it. The Short thesis is not new at all, as it has been on and off for the last few years. Primarily it has to do with the sustainability of dividends. Doesn’t think the Short thesis is solid. The company’s argument that a lot of capital expenditure has been for growth, rather than maintaining its operations, makes a lot of sense. The real question is, are you comfortable with the underlying business mix being essentially a specialty regional airline with some older planes, but make them last by completely overhauling them. There is also the acquisition of Region 1 taking older airplanes and selling them for parts. You have to be comfortable with the cyclicality and how well they manage it. If you are, this is a bargain.

This had a Short report issued on it. The Short thesis is not new at all, as it has been on and off for the last few years. Primarily it has to do with the sustainability of dividends. Doesn’t think the Short thesis is solid. The company’s argument that a lot of capital expenditure has been for growth, rather than maintaining its operations, makes a lot of sense. The real question is, are you comfortable with the underlying business mix being essentially a specialty regional airline with some older planes, but make them last by completely overhauling them. There is also the acquisition of Region 1 taking older airplanes and selling them for parts. You have to be comfortable with the cyclicality and how well they manage it. If you are, this is a bargain.

Jim Huang
President, T.I.P. Wealth Management
Price
$30.510
Owned
Unknown
HOLD
HOLD
June 16, 2017

Missed on Q1 operational challenges in aerospace. They increased costs on a fleet overhaul, as well as having some bad weather. Even without some of these challenges, they would have missed by 5%. Management is still modelling 12% EPS. The stock is pretty illiquid. Trading below its five-year average.

Missed on Q1 operational challenges in aerospace. They increased costs on a fleet overhaul, as well as having some bad weather. Even without some of these challenges, they would have missed by 5%. Management is still modelling 12% EPS. The stock is pretty illiquid. Trading below its five-year average.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$29.250
Owned
Unknown
PAST TOP PICK
PAST TOP PICK
May 2, 2017

(A Top Pick March 14/17. Up 9%.) *Short* A small manufacturer and aviation company. The aviation side of the business is far more important to them. They operate several regional airlines that service northern Canada, as well as the east coast. They also have an aircraft leasing business, Regional1 in the US. His issue is very much around their allocation of capital and that they spend their cash flow in a very dramatic way. CapX is greater than their operational cash flow, plus they have debt, plus they pay a dividend. Not a sustainable way to run a business.

(A Top Pick March 14/17. Up 9%.) *Short* A small manufacturer and aviation company. The aviation side of the business is far more important to them. They operate several regional airlines that service northern Canada, as well as the east coast. They also have an aircraft leasing business, Regional1 in the US. His issue is very much around their allocation of capital and that they spend their cash flow in a very dramatic way. CapX is greater than their operational cash flow, plus they have debt, plus they pay a dividend. Not a sustainable way to run a business.

Daniel Lloyd
Portfolio Manager, Forge First Asset Management
Price
$35.060
Owned
Yes
TOP PICK
TOP PICK
May 2, 2017

*Short*. Recently, the Northwest Company (NWC-T) who owns and distributes goods to northern communities, used to be a large customer, but are now a competitor having bought North Star Airline and planning on expanding routes, in direct competition with this company and some of their subsidiaries BearSkin and Perimeter. This still has capital problems and should not be paying dividends. Dividend yield of 6.2%. (Analysts’ price target is $47.)

*Short*. Recently, the Northwest Company (NWC-T) who owns and distributes goods to northern communities, used to be a large customer, but are now a competitor having bought North Star Airline and planning on expanding routes, in direct competition with this company and some of their subsidiaries BearSkin and Perimeter. This still has capital problems and should not be paying dividends. Dividend yield of 6.2%. (Analysts’ price target is $47.)

Daniel Lloyd
Portfolio Manager, Forge First Asset Management
Price
$35.060
Owned
Yes
BUY WEAKNESS
BUY WEAKNESS
April 27, 2017

Believes it has a pretty handsome yield. He used to own it years ago. It is a proper business. He thinks it has a good long term yield and should be picked away at on weakness.

Exchange Income (EIF-T)
April 27, 2017

Believes it has a pretty handsome yield. He used to own it years ago. It is a proper business. He thinks it has a good long term yield and should be picked away at on weakness.

Mohsin Bashir
VP Investments, Stone Asset Management
Price
$35.000
Owned
No
PARTIAL BUY
PARTIAL BUY
April 21, 2017

He models a 12% EBITDA growth over the next couple of years. Trades at a valuation that is lower than its five-year average. Debt to EBITDA continues to improve at around 2.2. The 5.5% dividend yield looks pretty safe. Missed on Q4 due to weather and equipment issues. You could be picking away at this time.

Exchange Income (EIF-T)
April 21, 2017

He models a 12% EBITDA growth over the next couple of years. Trades at a valuation that is lower than its five-year average. Debt to EBITDA continues to improve at around 2.2. The 5.5% dividend yield looks pretty safe. Missed on Q4 due to weather and equipment issues. You could be picking away at this time.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$38.160
Owned
Unknown
BUY WEAKNESS
BUY WEAKNESS
April 11, 2017

Shareholders have had really good returns in a short period of time, where there has been substantial growth, so things have to take a little bit of a breather at some point. This is an acquisition oriented company, so they are going to have higher debt levels at certain points. A solid company. Pays a nice solid dividend in the 5%-5.5% area. If you can buy this on a little bit of a dip, there are opportunities here.

Exchange Income (EIF-T)
April 11, 2017

Shareholders have had really good returns in a short period of time, where there has been substantial growth, so things have to take a little bit of a breather at some point. This is an acquisition oriented company, so they are going to have higher debt levels at certain points. A solid company. Pays a nice solid dividend in the 5%-5.5% area. If you can buy this on a little bit of a dip, there are opportunities here.

Cole Kachur
Senior Wealth Advisor, ScotiaWealth Management
Price
$38.150
Owned
Unknown
BUY
BUY
March 24, 2017

It has a 61% payout ratio so the dividend looks good. It is trading below its 5 year average The balance sheet is not bad, but they missed on Q4 due to weather and equipment issues which they have now mitigated, so you could go in and buy it.

Exchange Income (EIF-T)
March 24, 2017

It has a 61% payout ratio so the dividend looks good. It is trading below its 5 year average The balance sheet is not bad, but they missed on Q4 due to weather and equipment issues which they have now mitigated, so you could go in and buy it.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$38.730
Owned
Unknown
PAST TOP PICK
PAST TOP PICK
March 23, 2017

(Top Pick Apr 7/16, Up 43%) It is a good quality pick. This has been a total under-the-radar story. They did a phenomenal job of managing their assets. They have raised the dividend multiple times.

Exchange Income (EIF-T)
March 23, 2017

(Top Pick Apr 7/16, Up 43%) It is a good quality pick. This has been a total under-the-radar story. They did a phenomenal job of managing their assets. They have raised the dividend multiple times.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$38.020
Owned
Yes
TOP PICK
TOP PICK
March 14, 2017

*Short* This is sort of a mini conglomerate. They have a bunch of small regional airlines in Canada, as well as an aviation leasing business in the US, along with some small manufacturing businesses in Canada. This is what he would call “an access to Canada short” in that the underlying businesses do not generate enough cash to sustain the company as a whole. Subsequently they need to continue coming back to the market doing equity issue after equity issue. All the industries that they operate in are high capital intensive businesses. Just in CapX alone they have outspent their cash flow way, way back. Yet they pay a dividend yield of 5.34% and have a debt they have to service. If there was any market downturn and equity markets were actually shut off to this sort of constant equity issuance, the dividend would be in very, very serious trouble. (Analysts’ price target is $47.)

Exchange Income (EIF-T)
March 14, 2017

*Short* This is sort of a mini conglomerate. They have a bunch of small regional airlines in Canada, as well as an aviation leasing business in the US, along with some small manufacturing businesses in Canada. This is what he would call “an access to Canada short” in that the underlying businesses do not generate enough cash to sustain the company as a whole. Subsequently they need to continue coming back to the market doing equity issue after equity issue. All the industries that they operate in are high capital intensive businesses. Just in CapX alone they have outspent their cash flow way, way back. Yet they pay a dividend yield of 5.34% and have a debt they have to service. If there was any market downturn and equity markets were actually shut off to this sort of constant equity issuance, the dividend would be in very, very serious trouble. (Analysts’ price target is $47.)

Daniel Lloyd
Portfolio Manager, Forge First Asset Management
Price
$38.640
Owned
Yes
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