A Hidden Gem

Companies in which investment in growth has been performed wisely over a prolonged period are oftentimes family-controlled companies for which the street and activists cannot interfere. This is one of those companies.

Summary

  • Majority ownership in this company is held by one of Canada’s top 100 wealthiest families.
  • This company has generated a 12.7% compound annual growth in net equity value since inception (1969).
  • The company’s stock price is ~61% of net equity value per common share.
  • The strategy is to accumulate shareholder value through long-term capital appreciation and dividend income from its investments.

Introduction

If you read my previous articles you will:

  • likely be somewhat familiar with most companies or, at the very least, will likely have heard the company name at some point;
  • note that I typically analyze US listed companies as there is a very limited number of Canadian publicly listed companies that appeal to me;
  • see that my preference is to invest in mid and large cap companies with a sizable daily share float.

The company analyzed in this article, however, differs from the typical company I analyze in that it is a TSX listed company that is thinly traded.

I recognize there are risks associated with thinly traded equities but I have made an exception to the rule in the case of this investment.

In the Business Overview section of this analysis is an annual summary of this company’s financial progress since its inception in 1969. The results are impressive.

Here are some relatively recent statistics:

  • Assets under management (AUM) of ~$6B as at FYE2012 and ~$17B+ as at the end of Q1 2018;
  • Net equity value per share of ~$552 as at FYE2008, ~$1,317 at FYE2017, and ~$1,350 as at June 30, 2018;
  • the stock price is ~61% of net equity value per common share;

Compound annual growth in net equity value:

  • 2008 - 2017 (10 years): 7.7%
  • 1969 - 2017 (since inception): 12.7%

I find that companies in which investment in growth has been performed wisely over a prolonged period are oftentimes family-controlled companies for which the street and activists cannot interfere. This company is closely held by one of Canada’s top 100 wealthiest families and by investing in this company you may be able to benefit from their astute management decisions.

Please click here to read the complete version of this article.

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By |August 11th, 2018|General Investing|Comments Off on A Hidden Gem

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