Q: Hi, my question is a bit specific but also more general. I'm about 25% down on this stock. When I read, it seems that it's solid enough long-term, but it's not going to rise 25% for quite some time. As a non-resident, I cannot sell for harvesting tax losses, but I wonder if selling at a loss and putting the remaining money into something faster growing would be a good idea? Again, part of the question is about this specific stock, and part is a general query. I'm curious about your answer! Thanks!
5i Research Answer:
SVI has been under pressure in recent years due to headwinds from interest rates. That being said, the situation does not seem to be improving for SVI as rates are declining.
The reason is that SVI trades at a premium valuation relative to other REITs, but organic growth and the pace of acquisition has slowed down in recent quarters, making it a headwind for SVI’s share price as valuation contracted slightly. We think investors should give SVI some time to see if the slowdown is permanent or temporary. This is the first year its revenue growth dropped to mid-single-digits (they used to grow strongly by double-digits every year prior).