Sell or hold TFII?

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I bought in when it was at $36, and now it’s at $134. Some reputable sources say it’s still under-valued.

I’m trying to strike a balance between investing and swing trading. Is this stock worth holding for the long run, or are there better buy opportunities if I flip now? If it’s the latter, which TSX stocks have a higher potential for long term growth?

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Asked on December 7, 2021 1:15 am
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Hey Anirudh,

We don't believe too much in trading, but would also never fault anyone for taking profits off the table. Dan did sell some of his TFII on the way up, I haven't sold a single share and don't plan on it. I think the company remains attractively valued and has plenty of runway left.

TFII is no longer 'cheap' - at least when one compares where it was a couple of years ago. It was very cheap and one of the reasons why we added it to our bull list, we just couldn't ignore the undervaluation. I'd say it is closer to fully valued now. That doesn't mean it won't continue to perform well, its just the days of hyper-growth returns are likely behind them. I'd expect them to grow inline with growth estimates which is in the mid-to-high teens.

It does however, remain one of the better priced growth companies out there, so the downside risk is less with a company like TFII than some of the other hyper-growth companies on the TSX. TFII is also one of only three in the trucking industry and the leading company. So swapping TFII out for another growth stock would only make sense within the context of one's portfolio. In my case, I only have a few industrials, I would never swipe it out for a growth stock in another industry otherwise my weightings would go out of whack.

Mat

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Posted by Mathieu Litalien
Answered on December 8, 2021 5:25 am