Stock of the Week: CI Financial

This company’s been aggressively acquiring wealth (management).

Andrew Willis 4 January, 2022 | 4:48AM
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Andrew Willis: Coming off of a strong year and generous dividends, Canada’s big six banks made the most of 2021. But the best performance among the stocks we cover in the financial sector comes from a non-bank-affiliated asset manager.

In 2021, CI Financial (CIX) returned more than sixty percent year to date, as of December 6th, 2021. Successful acquisitions, new products, and market gains propelled the stock price while other non-bank peers came under pressure from the big banks.

Average fund assets under management were up nearly 15% year over year in the third quarter at CI, with sector strategist Greggory Warren saying the timing and contribution of its wealth management deals are proving to be more fruitful than expected. As a result, we’ve increased our fair value estimate for the stock.

It’s worth noting that this growth ahead for CI should be tempered by pressure on active management fees, which we see as headed in one direction only (down). And the big banks, with their distribution networks, have been using this pressure on price as a tool to take market share from independents. But while this might hurt fund flows, CI’s found other ways to grow.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
CI Financial Corp15.92 CAD-1.00Rating

About Author

Andrew Willis

Andrew Willis  Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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