Q: Stock had a good week - was this mainly as a result of the drop in interest rates? Going forward will growth be organic and or are there potential acquisitions (ex Propel) which could be made? Alternatively is the company itself a target for takeover and if so which companies could be potetial buyers? Thanks
5i Research Answer:
We would consider GSY a possible privatization candidate more so than a takeover. We doubt management would want to sell at 10X earnings. PRL stock is tightly controlled and might be hard to buy. GSY is sensitive to rates, and now that a rate decline in Canada is 'official' investor sentiment might indeed be improving. GSY presented at a conference last week and announced its loan portfolio is now over $4B.