Hey Kim, seems like an interesting growth stock, one that pays an almost negligible dividend.
There is strong potential for growth considering how fragmented the industry is. The company itself states that the top 10 operators own less than 15% of the 3000 nation wide stores. Considering Storage Vault expands via acquisition and purchasing profitable properties, this is a good thing.
I'd expect a stock like this to be extremely cyclical too. Not only will people book less storage in the winter time, but they'll also more than likely book more storage during economic booms than downturns, especially during a hot real estate market.
The company relies heavily on acquisitions to expand and has stated COVID-19 will more than likely play a part in them potentially missing acquisition targets for the first time. They expect to have acquisitions of $50-$75 million in 2020 and as of March 31st have only spent around $11.5 million. Because they rely heavily on acquisitions to expand, this could result in slowing growth in 2020 and possibly 2021. It's somewhat concerning.
There's also the fact that 1.8 million of its 8.1 million square feet (22.2%) of available space is located in Alberta, where there is almost no question the province will be hit hard because of this pandemic for the foreseeable future.
The company has saw some excellent growth compared to the first 3 months of 2019 with revenue up 37% and operating income up 32.3%. However, significantly higher operating costs are making it difficult for the company to start improving the bottom line.
We're in a very unique situation and it's hard to form an overall opinion when the future is so unknown. I'd want to see a quarter or two with full COVID-19 headwinds factored into the company's quarterly reports.
I know at the very least I'd be averaging into a position if I was looking to take one in the company. Or patiently waiting to see how bad Q2 will be. This stock isn't cheap on a price to sales and price to book basis, so even slowing growth could cause it to fall drastically.