Top Pick DetailsLast stock in the clip. GLTA
https://www.bnnbloomberg.ca/video/andrew-moffs-top-picks~2372663
Storage Vault Canada (SVI TSX) The investment thesis for StorageVault is based on two primary principles: (i) an attractive cash flow profile that is both high-growth and low in maintenance capital; and, (ii) the ability to accretively consolidate the industry’s ownership base.
StorageVault’s third quarter results highlighted this high growth cash flow profile as same-property revenue increased 23 per cent year-over-year and AFFO or free cash flow increased 46 per cent. The month-to-month nature of StorageVault’s leases allows the company to raise rents in response to the current inflationary environment much faster than traditional property types with longer term leases.
Canada has about 70 per cent less storage space per capita relative to the U.S., a key factor underlying the company’s strong rent growth profile. This free cash flow is also being used to consolidate ownership within the industry. Despite StorageVault’s significant asset base, the company still represents only 5 per cent of the Canadian market.
The top 10 owners combined hold only 15 per cent market share in Canada. There remains a large opportunity for StorageVault to acquire smaller operators and improve the profitability of their assets through leveraging the economies of scale of StorageVault’s operating model.
The corporation’s current implied cap rate of 4.7 per cent is well above U.S. portfolios transacting from 3.1 per cent to 4.0 per cent, and should compress as the Canadian industry continues to mature. Closing the gap would imply a share price over 30 per cent higher.
TOP PICK
StorageVault Canada(SVI-X)
30/01/2022 at 07:00pm
The largest operator of storage vaults in Canada. Is a market leader consolidating the Canadian industry. Recession resistant - a safe and secure investment. Lots of upside and has just moved to the TSX. Discount to NAV.
Andrew Moffs
$6.420
Owned