Q: Hi 5i,
I have held OTEX for many years as a 1.5% weighting and have a loss in a registered account. I am currently underweight tech and would like to slowly increase this sector. Based on the recent earnings and the division sale would you recommend adding, holding, or moving on with the position as a portfolio cleanup? If OTEX was sold would adding to a small position in CSU be a good move?
I have held OTEX for many years as a 1.5% weighting and have a loss in a registered account. I am currently underweight tech and would like to slowly increase this sector. Based on the recent earnings and the division sale would you recommend adding, holding, or moving on with the position as a portfolio cleanup? If OTEX was sold would adding to a small position in CSU be a good move?
5i Research Answer:
OTEX is recovering well, and is up 30% in a year. It hit a 52-week high this week and is not far off its all-time high (2021). At 9X earnings, with an improving balance sheet, we would be very comfortable holding this right now, and adding 'some' into weakness. It is not a high growth name but is priced very well and valuation could improve as debt risk declines.