Q: With their US acquisition all but effectively locked (only Canadian regulator to go), is this a good buy? For small cap growth over the next year or two?
5i Research Answer:
VBNK is a small $387M company, but its financials have seen a big turnaround from a slow FY2022, and it completed several buybacks over the past two years which have helped support its share price. It is thinly traded which can cause significant volatility in its price, but fundamentals are moving in the right direction, and with its latest acquisition, we feel it looks fairly attractive here at 9.7X forward earnings and 1.0X book. We think it looks interesting, while being mindful of its small size, liquidity, and volatility risks.