London, UK, 15 November 2022
Edison issues review on Canadian General Investments (CGI)
Canadian General Investments (CGI) is managed by Greg Eckel at Morgan Meighen & Associates (MMA). He explains that in 2022, the stock market has been driven by macroeconomic events and investors have essentially ignored company fundamentals, which are the long-term drivers of share prices. The manager is sticking to his principles and continuing to focus on stock selection - a strategy that has led to a very commendable long-term record of outperformance. Eckel believes that stock market volatility is likely to persist as central banks need to further tighten monetary policy to combat higher inflation; he does not anticipate a repeat of the V-shaped market recovery seen during the COVID-19 pandemic. If the macroeconomic backdrop improves, the manager expects quality companies to outperform, so for now he is 'weathering the storm' and looking forward to sunnier times.
In an environment of heightened investor risk aversion, CGI's 33.7% discount is wider than the 29.9% to 31.7% range of average discounts over the last one, three, five and 10 years. The company pays regular quarterly dividends, and its annual distribution grows steadily (+4.5% in respect of FY22). Based on its current share price, CGI offers a 2.7% dividend yield.
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