We came across a Haussier thesis On Rogers Communications Inc. (RCI) on Nugget Capital Partners’ Subk. In this article, we will summarize the thesis of the Bulls on RCI. The action of Rogers Communications Inc. (RCI) was negotiated at $ 26.65 at 9th June. RCI monitoring and p / e were 11.27 and 7.73 respectively according to Yahoo Finance.
A close -up of a telecommunications tower with electric lines that connected, representing the strength and reliability of network services.
Rogers Communications (RCI) seems deeply undervalued in the middle of a telecommunications sector which has fallen into disgrace with investors, despite signs of fundamental force and future catalysts. The main one among these is the potential monetization of its MLSE (Maple Leaf Sports & Entertainment) – assets of high value that does not generate any Ebitda but which could be worth up to $ 15 billion, depending on the management.
Discussions with institutional investors would be in progress, and although a full sale seems unlikely due to the dissemination commitments of Rogers in the NHL until 2038, a stock exchange or partial disinvestment could unlock a significant value. Coupled with the imminent closure of an equity agreement of $ 9 billion which will reduce the lever effect by the 1x Ebitda, Rogers goes from the highest lever profile to the lowest among Canadian telecommunications.
Meanwhile, the sector shows signs of stabilization: ARPU is declining, prices seem to be outline and the 5G construction cycle charged with CAPEX is declining, which can cause the margin expansion.
Rogers, Canada’s largest wireless supplier, also benefits from coherent growth in immigration subscribers, with an increase if a new government provides a clearer immigration policy. Trading at historic stockings through EV / EBITDA, profits and prices / book, the action offers an attractive entry point with a limited drawback, in particular given the increased institutional interest and the confidence of the initiates.
Although the feeling remains negative after reducing the division, recent defensive performance in broader sales on the market support the opinion that telecommunications probably have a substance. With the improvement of fundamentals, a probable MLSE monetization and a reduced lever effect, Rogers offers a convincing asymmetrical opportunity in a neglected class of assets.
Previously, we have covered a show Haussier thesis On Precision Drilling Corporation (PDS) of Nugget Capital Partners, which designed the company as a poorly understood Canadian platform manager with strategic exposure on the basin, pricing power and high quality of assets. Despite the sweetness of the United States, the Canadian resilient demand and the solid free cash flow underpin the increase in a depressed evaluation. The stock appreciated about 15% from our coverage.
