Edison reviews Canadian General Investments (CGI)

RNS Number : 8549F

Canadian General Investments Ld

31 October 2018

 

London, UK, 31 October 2018

Edison issues review on Canadian General Investments (CGI)

Canadian General Investments (CGI) aims to generate an attractive total return from a portfolio of primarily Canadian equities. Manager Greg Eckel describes the fund as a 'one-stop-shop' for investment in Canada. He says that the country is currently out of favour with investors, and equity valuations are reasonable, which may provide an attractive opportunity. While he invests for the long term, Eckel actively manages CGI's portfolio, seeking to buy companies with attractive fundamentals and long-term growth potential, while adding to or trimming existing positions to maximise returns. This strategy has proved effective, with CGI outperforming its S&P/TSX Composite index benchmark over one, three, five and 10 years. It also offers an attractive dividend yield of 3.5%.

Since early 2017, CGI's discount to NAV has been in a narrow band; its current level of 29.2% compares with the average discounts over the last one, three, five and 10 years of 29.4%, 28.9%, 28.8% and 26.4% respectively. The fact that the discount is persistently wide, despite the company's positive long-term performance track record, may be because of the high level of insider ownership, or due to its relatively high level of gearing. To enable CGI to maintain its favourable tax status, the board is unable to repurchase shares to help manage the discount.

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