Hi Jacob,
CI Financial is an asset management company - and these types of companies have been among the hardest hit sectors since the pandemic began. Interestingly, while many have rebounded, CI Financial seems to be stuck in neutral. It is trading at pretty cheap valuations (Forward P/E of only 6.68) and yields an attractive 4.3%.
Its performance however, has been quite spotty over the past handful of years. Even before the pandemic, it was trading near multi-year lows. This is likely because revenue and EPS have been pretty much flat since 2015 despite some spikes here and there. It is however, the cheapest it has been since the Financial crisis - and may present decent risk to reward potential.
The most recent acquisition is actually its 13th this year and is reflective of the company's new strategy - to be more aggressive in the IRA (wealth management) space. This should enable it to break its multi-year downtrend of stagnant or declining growth in the asset management segment. It is however, still early in the game for them and growth through acquisitions doesn't always work out. As it rapidly expands its U.S. presence, it also received listed on the NYSE under the symbol CIXX. This may increase the company's profile, and liquidity.
Having more of a balance between asset and wealth management should benefit the company in the long run. Once again however, early stages of this new strategy and by all accounts, the company's acquisition spree is just getting started.
It does look pretty interesting at these prices and it will come down to execution. I like the risk to reward proposition because it is trading at basement prices. If you compare YTD Highs and lows, it has 34% downside versus 46% upside. I'd argue that it is more likely to continue recovering from its pandemic lows than it is to touch lows once again - all assuming of course, a second crash doesn't occur. It is also trading at 20% discount to analysts one-year estimates. These estimates are likely to be revised once there is more clarity in how these acquisitions are being integrated and if they are successfully driving growth.
Mat