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  5. GSY: I'm considering taking a position in the sub-prime Canadian lenders. [goeasy Ltd.]
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Investment Q&A

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Q: I'm considering taking a position in the sub-prime Canadian lenders. Between Propel and Goeasy, which one would you choose to maximize total returns given the current market price? Is there an advantage in holding both with a (50/50) position? Planned holding period is 3 to 5 years.

Thanks for the great service.

André
Asked by André on March 28, 2025
5i Research Answer:

With the decline in PRL we think a 50/50 position would be best, just to balance out single company risk a bit. GSY is larger and more established and thus can be considered a bit 'safer' if one only wants one. But PRL likely has more 'bounce' potential considering its fundamentals have no deteriorated anywhere near close to the stock price level of deterioration.