Exco Technologies Limited (TSX-XTC)

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Hi,

Would like to get an updated insight on XTC. Seems to have been a downstrend over the past 5 years including through COVID initially. Looks to be on a recovery throughout COVID and on an upward trend with other automotive industrials (i.e Magna, Linamar). Also still pays its dividends with 12 increases over the past 13 years. Any thoughts?

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Asked on March 14, 2021 7:02 am
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Thanks Matt for the insight. Will keep a watch into/including next earnings.

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Posted by Jason Chong
Answered on March 14, 2021 1:30 pm
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Hi Jason,

I own it and it has been a very frustrating one to own. It lost a couple of contracts over the years and exited a line of business and then Trump trade war happened and the uncertainty of NAFTA led to them putting a halt on expansion plans in Mexico. Prior to that it was well positioned and growing nicely.

Despite all this, XTC has managed to deliver strong cash flows and as you pointed out has been able to build an impressive dividend growth streak.

What I am unclear on is their growth plans. It used to be quite clear but after the entire NAFTA issue they have remained silent so that is what keeps me a little cautiuos here. They mentioned EV as a growth vertical, but no indication of wins or how they intend to go after that vertical. Unlike a company like Magna, which has made several announcements.

I still like it, but I'd really like more clarity from them on their growth plans moving forward. Until then, I think there is no better auto part manufacturer than Magna.

Mat

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Posted by Mathieu Litalien
Answered on March 14, 2021 7:56 am