Q: I would appreciate an updated opinion on Groupe Dynamite. Thanks!
5i Research Answer:
There is not much new since our last comments, though the stock has drifted quite sharply lower, now down 13% YTD. Not great for a new IPO trying to attract new investors. There has been no news in more than a month. It did beat estimates in its first publicly-reported quarter, (41c vs 38c). Sales rose 17.5% and same-store sales rose 10%. The stock is cheap at 12X earnings. We see no red flags here, other than our typical caution on new issues. Aritiza seems to have gotten the majority of the flow of money in the sector after its strong results. Overall, we would remain comfortable sitting on the sidelines with GRGD.