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David BurrowsFiera Capital CorpFSZ.TOWEAK BUYSep 23, 2021

Really likes the investment management sector. It should be pretty good business in a time of a decent market and reflation. Great company. Decelerating revenue growth. Relative underperformer. Dividend is attractive at 8%. When a group gets into gear, you want to look at the leaders. He owns BX, CIX, BLK, IGM, and POW. You could also look at the IAI ETF.

David Burrows

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$10.61

Stock price when the opinion was issued

$5.29

As of Jun 19, 2026. Market Open.

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DON'T BUY

Doesn't pay a high dividend and carries a lot of debt. They do debt-fuelled acquisitions. He doubts they can maintain their dividend.

COMMENT

It is in the field of asset management and manages $164 billion in assets. It has grown by acquisition in the last while but the stock price is too low now for them to use it as currency for more acquisitions. It needs to be bigger in this type of business and there are better places to be.

DON'T BUY

Company seeing outflows in business.
Lots of debt negatively affected by rising interest rates.
Current share price very cheap.
Business moving sideways (not growing).
Prefer CI Financial/Guardian Capital.

BUY ON WEAKNESS

Canadian asset manager that has seen low share price (higher interest rates).
AUM growth has been weaker due to choppy markets.
Cyclical business that will recover with flat interest rates.

DON'T BUY

Believes company has done good job in growing & diversifying business. Largest portion of business in equities. Excited about move into private business models. Weak financial numbers lately a concern. Would not recommend buying company. Stick to Blackstone instead.

COMMENT

FSZ vs. ZWU Both pay around an 8% dividend, which at that level it's probably not pure dividend you're getting on a long-term basis. About 6.5% is the limit for a sustainable dividend level. Plus, you get worries about the future of hydrocarbon demand. He himself doesn't see this, but it's a scenario to consider. Both FSZ and ZWU, you're getting some of your capital back to fund their dividends--this is not sustainable. ZWU has underperformed the equal-weight bank ETF since inception. So, the covered call portion isn't adding value, but is an additional-fee generator. He's rather buy the underlying stocks. Fiera has done a ton of purchases, not all of them cheap or good. Their wealth management business has been positive in the last 18 months, but you risk a market correction and a major re-pricing of assets, more so than any Canadian bank.

BUY

Unusually high dividend should get your spidey senses tingling. Market doesn't believe dividend is sustainable, but he does and thinks it will grow slowly over time. Unique asset manager in that they've created some growth. Strong leadership. Dividend is compelling, doesn't foresee huge capital appreciation. Comfortable buying for income.

BUY

Dividend is safe. Dividend has grown about 13% compounded over the last decade. Size and cadence of dividend has slowed. Company is surviving and thriving, due to management. Earnings growing consistently. Good acquirers. Has a bit of beta, so a good play in this market. Cheap at 8x earnings.

DON'T BUY

Good alternative to a bank share? In a word, no. Their big 20% share drop move is significant. Asset management growth companies are more volatile, especially in falling markets when asset values are falling. He prefers to own traditional banks for their better dividend yield and more diversified business.

PAST TOP PICK

(A Top Pick Sep 27/19, Up 13%) They bought one of the world's largest fund managers. Pays a sustainable 7% dividend yield. In falling markets, active managers outperform, which will benefit Fiera.

DON'T BUY

They grow by acquisition, some smart ones, but the asset management business is tough, given ETFs and robo advisors. Nothing against Fiera, but the sector faces these hurdles. He's watching Fiera.

TOP PICK

The third largest independent asset manager in Canada. They have 100B in assets. They are doing rollups now. A major French asset management entered into an agreement with them and bought 11% of National Bank's shares.

COMMENT

Pays nearly a 7% yield. Cheap PE, too. They've grown by acquisition, owning hedge funds,. private equity, etc. But can they grow organically and increase margins? If they acquire, they must buy big companies to make enough of an impact. They also face heavy competition from ETFs and companies like Blackrock.

HOLD

He does not own this. They have grown by acquisition. He believes the company is buying assets with the eye that an institutional buyer will take them out -- a good strategy he thinks. Yield 7.5% (Analysts’ price target is $14.00)

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David BurrowsFiera Capital CorpFSZ.TOWEAK BUYSep 23, 2021

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