Q: QBR.B seems to have some favourable financial metrics and to be liked by analysts, yet the share price has been drifting lower for a couple of months. What is your view of this stock and do you see it's share price improving over time? Would you buy, sell or hold? Thanks.
5i Research Answer:
The sectornhas been struggling somewhat, with high capital expenditures and some concern on advertising growth. Competition has also intensified. It is priced well, at 9X earnings, with a secure 4.1% dividend. But, not much earnings growth is expected, and debt is quite high at more than the 5X cash flow. We would deem it 'OK' for income but do not think it needs to be owned. We would rather see less debt and more growth.