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StorageVault Canada Inc. (SVI)
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TELUS Corporation (T)
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Dream Industrial Real Estate Investment Trust (DIR.UN)
Q: Hi Peter, Ryan & Team,
Thanks for your recent report on SVI.
In a non-registered account, we own DIR.UN, but not SVI. Looking at the charts, I see that SVI is outperforming DIR.UN over all time periods. Would you endorse selling about half of DIR.UN and using the proceeds to buy SVI?
Alternatively, we own Telus in this account, which is at a loss. Would you endorse selling all of T (for tax loss purposes) and use the proceeds to buy SVI. In this scenario, we wouldn't sell any DIR.UN.
Which alternative would be preferred?
Your valuable advice is always appreciated.
Thanks for your recent report on SVI.
In a non-registered account, we own DIR.UN, but not SVI. Looking at the charts, I see that SVI is outperforming DIR.UN over all time periods. Would you endorse selling about half of DIR.UN and using the proceeds to buy SVI?
Alternatively, we own Telus in this account, which is at a loss. Would you endorse selling all of T (for tax loss purposes) and use the proceeds to buy SVI. In this scenario, we wouldn't sell any DIR.UN.
Which alternative would be preferred?
Your valuable advice is always appreciated.
5i Research Answer:
While we cannot personalize responses, we would be okay with the second alternative of selling T for tax loss purposes and using the proceeds to add to SVI at the current prices.
We think SVI is a unique compounder in the real estate industry. SVI’s addressable market is large. Given its track record of acquisitive growth and trading at a discount in valuation relative to historical averages, we think the risk/reward for SVI as a long-term holding here is quite attractive. That being said, investors need to be clear that the prospective returns going forward for SVI would likely mostly come from capital appreciation - SVI is not a pure high-yield dividend stock like DIR.UN or T.