Osterweis Opportunity Fund on FirstService Corporation
Thesis
FirstService experienced a difficult second quarter because its roofing and residential closet businesses remained soft. The fund expects organic growth to improve during the second half of the year as comparisons become easier and storm-restoration activity normalizes. Despite weak recent results, the managers are maintaining the position. They also note that FirstService's valuation is near the low end of its ten-year history and see it as an attractive place to allocate capital if the AI trade cools.
“we are maintaining our position, as revenues should accelerate and its valuation is at the low end of its ten-year history.”
Key risks
- Roofing and residential closet businesses have remained soft.
- Organic growth has been weak for several quarters.