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TerraVest Industries Inc. (TVK)
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Hammond Power Solutions Inc. Class A Subordinate Voting Shares (HPS.A)
TVK has been an active user of debt in its acquisition strategy. Its net debt is $347M, and net debt/EBITDA of 2.3x. The company has consistently run a leveraged balance sheet in the range of 2.0x to 3.0x over the years, and we would not be too concerned with the debt level here.
HPS.A had a great run. HPS. A is trading at 20x Forward P/E and is expected to grow low double-digits over the next few years. The prospective return may not be as good as it has been in the last year, but we think it is still an attractive name here given the recent drawdown.