London, UK, 7 November 2019
Edison issues review on Canadian General Investments (CGI)
Canadian General Investments (CGI) is a well-established company with a long-term track record of outperformance. Manager Greg Eckel is 'sticking to his knitting', seeking companies with strong fundamentals and well-respected management teams, that are trading on reasonable valuations and can be held for the long term. While there are economic headwinds, including the ongoing US-China trade dispute, the manager says that 'Canada remains an island of stability', and suggests investors may benefit from Canadian exposure as part of a global portfolio. Eckel is continuing to find what he considers to be interesting investment opportunities in a variety of sectors, in both Canada and the US.
While CGI consistently trades at a wide discount, there have been brief periods in the last 20 years when the company traded at a premium (most recently in 2006). The current 32.4% discount to cum-income NAV compares with the 27.1% to 30.3% range of discounts over the last one, three, five and 10 years. Having remained stable for the prior six years, FY19 marks an increase in CGI's annual dividend; the fund now offers a 3.3% yield. The company follows a levered strategy; at end-October 2019, net gearing was 16.2%.
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