BUY: Pentair (NYSE: PNR)
We initiated a position in Pentair (NYSE: PNR), which makes equipment that moves, cleans and filters water for pools, homes, businesses and cities. About 80% of its pool sales come from repairing and replacing equipment on existing pools, which tends to be steadier than new construction, and its recent purchase of Taco adds heating and cooling equipment used in buildings such as factories and hospitals. The shares have fallen about 35% this year, largely because distributors and dealers cut back their orders to reduce excess pool stock, an adjustment management says is now complete. With 50 consecutive years of dividend increases, Pentair fits our focus on companies that grow their dividends, and with shares priced below what we believe their intrinsic value is, we view this as a good balance of potential reward and risk.
BUY: Rogers Communications (TSE: RCI/B)
We initiated a position in Rogers Communications (RCI/B), which is Canada's largest wireless carrier and a fully integrated communications company, providing 5G wireless, cable internet and television, as well as sports & entertainment content through assets including Maple Leaf Sports & Entertainment (MLSE) and the Toronto Blue Jays. Its Wireless and Cable segments, together represent roughly 83% of total revenues, providing a stable base of recurring revenues supported by industry-leading margins.
Its share price has declined approximately 12% YTD, and trades at multiples below the ten-year averages, as wireless pricing and volume pressure, as well as concerns around satellite competition have weighed on the stock - we believe these risks are largely reflected in the current share price. With the Shaw integration largely complete, and the company making meaningful progress in reducing its capex, its free cash flow (FCF) increased 65% year over year in the latest quarter, supporting continued debt reduction, while reaffirmed 2026 guidance, provides a credible path to further deleveraging along with the potential sale of a minority stake in Rogers Sports (MLSE + Blue Jays) in the first half of 2027. With a dividend yield of approximately 4.5%, and a low payout ratio, we view Rogers Communications’ current valuation as an attractive entry point as free cash flow and the balance sheet continue to improve.
This BCV Bulletin is intended for residents of the provinces and territories in which we are registered, is not meant to be a solicitation to any persons not resident in those jurisdictions and does not constitute an offer to buy or sell our products or services. Any opinions expressed are just that and are subject to change. Information is provided on a best-effort basis and its accuracy cannot be guaranteed. Information may also be provided from third party sources which are believed to be reliable, but we do not guarantee its accuracy or completeness. Certain statements may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This BCV Bulletin has been prepared for general informational purposes only, is not intended as investment and/or financial advice on any subject matter and the securities mentioned should not be construed as a recommendation for any specific securities. ©BCV Asset Management Inc. 2026.
