RE:Jason Donville - BNN - DON'T BUY Jason didn’t explicitly advise against buying Tucows. Instead, he mentioned that he had previously held Tucows stock but sold it 5-7 years ago at around $70. He also highlighted that the internet business was still in its early stages and might lack a competitive moat, especially concerning satellite services.
Tucow has and will likely have negative ROIC for a while as they invest in the future. Specifically, Ting Internet has expanded into Greenwood Village, Colorado, last month, and California, and Mesa, Arizona, this year.
In my opinion, Tucows represents a turnaround play. If they manage to achieve improve ROIC, the stock could see a re-rating. As Peter Lynch wisely advises, “Look for turnaround companies.” When a stock transitions from being “crappy” to “semi-crappy,” it tends to rise. Further improvements could lead to even better performance. However, once a business becomes truly terrific, it might be time to exit.
Considering the current pricing, Tucows appears undervalued. If the company continues to make strategic moves, we can expect an improved outlook and a potential re-rating.
Peter Lynch Interview timerstamp 6:12 - 6:22: https://www.youtube.com/watch?v=LQpUfQfu49s&list=LL&index=10&t=543s
https://thecoastnews.com/ting-expands-into-carlsbad-with-ubiquity-partnership/