Q: I own a couple of banks, SLF and MA in my financial allocation. Thinking of adding GSY or BN. I know there different in size, but GSY probably offers more growth.
Would you be comfortable adding GSY with a 3-5 year time commitment, or is BN the better choice?
Would you be comfortable adding GSY with a 3-5 year time commitment, or is BN the better choice?
5i Research Answer:
We would be comfortable owning either BN or GSY, and feel that each offers unique value for investors. BN is a solid company that is larger in size and has an excellent management team. BN offers investors a balance of growth and conservatism and can be considered a 'sleep easy at night' stock. GSY, on the other hand is a smaller name ($2.1B market cap) and has exhibited excellent growth rates over the past several years. Its share price has increased at an impressive 24% CAGR over the past 10 years. It is to be considered higher risk, as well as higher growth, and we feel that with a potential 'risk-on' market over the next year or more, we would be comfortable with GSY here, while acknowledging small cap risk and position sizing.