Q: Hello 5i
I just noticed that in answer to a question you have put adt.ca ahead of premium brands in its category as a favourite pick. I have been worried that adt direction may be looking for a big way to make their mark in their acquisition. I have wondered whether that would bring them to abandon their usual caution. I hold pbh at now, a quite small capital gain and have been thinking about selling it. Just wondering what makes you so confident about this deal. And also, whether it is good enough to make the switch?
Thanks for this great service
I just noticed that in answer to a question you have put adt.ca ahead of premium brands in its category as a favourite pick. I have been worried that adt direction may be looking for a big way to make their mark in their acquisition. I have wondered whether that would bring them to abandon their usual caution. I hold pbh at now, a quite small capital gain and have been thinking about selling it. Just wondering what makes you so confident about this deal. And also, whether it is good enough to make the switch?
Thanks for this great service
5i Research Answer:
We would affirm our ranking of ATD over PBH, moreso because of ATD's recent weakness. It is not so much that we believe the Seven &i deal will succeed, but in the fact we like ATD either way. It has a very strong record of acquisitions, and will walk away if it cannot make a deal that works for it. ATD is a $67B company, and management is viewed as very strong. It has done so many acquisitions that we do not believe ego is at play here. It will either work, or they will walk. PBH continues to struggle a little bit. If an investor only wants one or the other, we would side with the much larger and likely safer ATD.