Q: I've been considering buying TVK for some time. One of the things holding me back is the potential of a Trump victory and the subsequent imposition of 20% across the board import tarrifs. Given the resource industries that TVK supports, what impact on share price would you predict such tarrifs would have? Would you suggest prospective buyers of TVK wait until after the election to wade in?
5i Research Answer:
Last year TVK had 43% of its revenue in the US. The political question is valid, but requires many layers: Trump needs to win, the tariffs actually need to be imposed (in other instances he has backed off) and one needs to gauge the market reaction to both a possible victory and the tariffs. There is likely at least some of the worry priced into the valuation already. Rather than guess on multiple outcomes, we think a half-position is likely the best approach for those interested in the stock.