Q: Can you please share your outlook on Trican? $5 seems to be multi-year resistance. Do you feel the long term story is intact?
5i Research Answer:
TCW is an $856M company with a 4% dividend yield, moderate sales and earnings growth expectations, and it is trading at a reasonable valuation of 7.7X forward earnings. It has traded mostly sideways over the past couple of years, but its balance sheet has also contracted over the years. It is currently quite profitable and generating strong free cash flows, and if it continues to repurchase shares and execute on profitability, we feel that eventually it can breakout of its current range, but some patience may be required by investors.