Post by
Zipolitemexico on Jun 01, 2021 8:56am
Scotia McLeod PT $44.00
OUR TAKE: Positive. Q1/21 Adj. EPS came in higher-than-expected driven by a sizeable realized gain of ~$0.34/sh from the Power Pacific portfolio. On top of driving the earnings beat, the alternative investment management platform was on full display this quarter, driven by the newly surfaced fair value of its investment in Wealthsimple, and its continued progress in launching new strategies and raising third-party capital. The alternative investment platform has now reached $7.4B of funded AUM (up from $5.6B in Q4/20), with 56% from third parties, and has $3.9B of unfunded committed capital (up from $2.9B in Q4/20). POW's stock is up 28% year-to-date, well ahead of the S&P/TSX Financial Index at 19%, and outperforming its largest publicly traded subsidiary GWO which is up roughly 21%, driven largely by a ~400bps narrowing of its NAV discount since the beginning of the year. That said, we believe valuation remains attractive as our estimated current NAV discount of 26.8% continues to be historically wide.
Maintaining $44.00 target price and Sector Perform rating.