Q: 18-24 month hold. In your opinion, which will perform better: LMN or TVK? And why?
5i Research Answer:
Both companies possess a decent track record of growth through acquisitions and capital allocation strategies. We think both can do fine with similar prospective returns from the current levels. TVK is still trading at a good valuation (12.7x EV/EBITDA), although not as attractive as it used to be, while LMN trades at a premium valuation. LMN, though, has upside potential if the company can manage to improve its organic growth profile. Both compete in different sectors and we don’t see any issues owning both names, but if we had to choose one, given its better recent momentum, we would give TVK the slight edge today.