CAE continues to offer investors unique industrials exposure. The company’s market leadership, providing a very specialized offering makes it an attractive opportunity. In its most recent quarter, CAE’s reputation and ability to win contracts was on display with significant order intake across both its segments. While there are some near-term headwinds that may affect growth in Civil Aviation,
the long-term story there is still positive, while the Defense segment has numerous tailwinds. As things stand, we think it is trading at a fair multiple and will need to see further growth and margin improvements to warrant any further multiple expansion. We are maintaining our rating of a B+.

CSH.UN has been one of the best performing REITs over the past two years amidst broad sector weakness. The Trust has managed to navigate the high-rate environment and execute its acquisitive growth strategy with 2024 being a record year. Unit prices have thus appreciated significantly to where it is quite expensive from a valuation standpoint. However, there are plenty of positive fundamental trends, with increasing occupancy rates, fund flows, and margins. Leverage is high, but we like the recent momentum, and the distribution is well-covered by cash flows. We think future growth from acquisitions and growing occupancy will be positive over the long-term, but we would not expect similar appreciation as seen in 2024. We are maintaining our rating of a B.

A brief update on select companies from the 5i Research coverage list. This report serves as the official rating update on the companies referenced herein. New ratings, if applicable, will be reflected in the Summary report at month-end.