Q: Can you comment on the fundamentals and valuation of OTCM
5i Research Answer:
We like OTCM; we think OTCM is a high-quality business with decent organic growth over the years (high single digit) without any meaningful acquisitions, OTCM has a solid balance sheet with no long-term debt and a track record of paying special dividends occasionally. OTCM is trading at a fair valuation of 22.2x Forward P/E. We think the current valuation is quite attractive for such a decent business, although the trading volume is quite thin. We also like X, we think X is also an attractive business as the company operates as a quasi-monopoly Canadian exchange.