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Savaria Corporation (SIS)
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Hammond Power Solutions Inc. Class A Subordinate Voting Shares (HPS.A)
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ADF Group Inc. Subordinate Voting Shares (DRX)
Q: Hi 5i, I'm struggling to keep the mentioned companies in the face of pending 25% steel and aluminum tarrifs. Would appreciate a review and some comforting analysis :)
One thing not talked about is the dollar impact on these companies which have US sales, and the potential benefit of monetary policy easing faster now that this tarrif nonsense has basically put on hold any investment in our industries.
My gut is telling me that our last year recession, masked by insane immigration, will become an official recession this year.
Thx
One thing not talked about is the dollar impact on these companies which have US sales, and the potential benefit of monetary policy easing faster now that this tarrif nonsense has basically put on hold any investment in our industries.
My gut is telling me that our last year recession, masked by insane immigration, will become an official recession this year.
Thx
5i Research Answer:
Certainly if tariffs stay in place Canada's economy is vulnerable. A 25% tariff would likely hurt GDP by 2.5% to 3%, pushing us into recession. But....the 25% tariff has been delayed, and might just be posturing. Many stocks have already adjusted valuations. Some of SIS products may be exempt. We can't really comfort much as too much is in the air right now. But at new valuations, at least some of the concern is certainly priced in. These three are in good financial shape (SIS less so than the others) and will be able to handle a recession. Sentiment has shifted sharply and any good news could amplify moves. There are risks, but this is not the first trade war in North America, and much could change still.