Section1: Company Overview and Fundamental Insights

1.1 Company Overview:

Cogeco Communications Inc. (TSX: CCA) is a Canada-based company that provides residential and business customers with Internet, video and telephony services. It provides two-way broadband fibre networks, operating in Quebec and Ontario. The Company operates through two segments: Canadian broadband services and American broadband services.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~53.66% of the total shareholding. Rogers Communications Inc and Mackenzie Financial Corporation hold a maximum stake in the company at ~­­­36.73% and ~8.11%, respectively.

1.4 Key Metrics:

The company reported growing revenue and Adjusted EBITDA numbers on the YoY basis, which is a key positive. Moreover, it has posted increase in its net profit in Q1 2023 against Q1 2022, while cash from operation before non-cash operating activities also increased for the same reported period, proving its resilience and agility.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of its recent activities, here the company shared information regarding its dividend distribution, extended advanced fiber network and the confirmation on launch of cloud-based service.

2.2 Insights on Q1 2023 Financial Performance:

Section 3: Key Risks, Company Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is Jan 13, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

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