Q: I liked the concept of Dexterra but it has not performed particularly well. It has a newish board. What is your view?
5i Research Answer:
DXT is up 19% YTD and 27% over one-year. We would certainly view that as acceptable. At 12X earnings it is not overly expensive. Good growth is expected next year. The balance sheet has improved, but there is still a bit of leverage. The last quarter was very strong with a big 'beat'. Our main concern with it is its cyclicality. Because of this, it may never get a huge valuation multiple. But with a recent asset sale to further improve its financial position and recent strong numbers we do not have much to complain about here.