# StorageVault Canada Inc (SVI)



## Cheeter (6 mo ago)

Just added more of this stock (SVI) to my portfolio. Every where I go I see new self storage units being built. Many new units along the 401 between London and Toronto. Wish I owned a self storage business myself but owning stocks in one is the next best thing.


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## londoncalling (Sep 17, 2011)

I like the concept of storage unit business myself and think it would be one that doesn't require a ton of effort to operate. I also don't think there is a ton of money to be made as a result. Perhaps I am wrong and if the units are already built there probably is not a lot of overhead. Nonetheless I took a look at SVI awhile back as it reminded me of another opportunity I passed up and the was Park Lawn Corp back in 2017. I took a quick look again today at SVI and the company still has a negative EPS. I don't buy companies that have negative ROEs and negative ROA.s This does not mean that it is not a good play as I have seen many stocks with poorer metrics skyrocket in value. Do you have an exit strategy?


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## Cheeter (6 mo ago)

Hi Londoncalling, this is probably more of a response than you were looking for but I thought I should give a complete explanation of why I invested more into (SVI) as some people may want to follow my lead.
The typical profit margin of a self-storage businesses is 14% where as most small businesses such as restaurants is about 3% to 5%. The estimated growth rate of the self storage sector in Canada is expected to be 8% annually going forward. Most of my stocks I buy on speculation. SVI has been re-investing profits into acquiring more storage units. Personally I am only up 7% in the last few months, but expect that to change for the better in the near future. In one year inflation has gone up 8.2%, Food has gone up 8.8% and gas 55% and the list goes on, putting a lot of home owners on the edge. That and the rise in mortgage rates is going to cause some people to lose/sell their homes but also passing the "Stress Test" is going to be difficult for many when they go to re-mortgage, as the value of many people's homes will be less than what they paid for them. Their belongings end up in storage. Then there's the continuing shipping problems that are causing more businesses to rent extra storage. Because of that I see a lot of full storage units in the future. My exit strategy will be based on the economy turning around for the better. Only time will tell. I hope I have raised your confidence in this companies (SVI) future and in the sector in general.

PS: I had Park Lawn (PLC) in 2019 and sold it in 2020 when it hit my stop. I should have bought back in.


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## londoncalling (Sep 17, 2011)

@Cheeter Thank you for your detailed and informed reply. You have definitely done your homework on the industry which is more than what some do with stock selection. I was interested in SVI for some of the reasons you listed. I also believe they one of the biggest (if not the biggest) player in the space.


supply chain
economic hardship due to inflation and interest rate pressure
reshoring and increased inventory

Another thing I liked about storage was that the owner does not require a lot of employee costs and overhead loss like you would find in many service sector business (employee theft is a killer, so is food waste).

I hope SVI does well for you and that it becomes a 10 bagger. Unfortunately for me, momentum is not a strategy that works with me or my style. I am good at seeing potential opportunities (ex. pot stocks a few years back, the recent tech run up, and plc as already mentioned). My problem is I would not know when to cash out (ex. the last energy bull market 2010-2014). I bought in watched it soar both up and down. 

Although stops are a great way to ensure you exit at a set price, I am not like them myself. I find there are too many market makers that manipulate the market in the short term and have been given examples of being stopped out on a bad day only to not get back in as the stock takes off again. I do use my own mental stops where I reevaluate the postion.

I do expect SVI to do well in the short term and medium term. I think the potential is there even longer term. Just as an aside I opted for Jamieson Wellness over SVI. I don't expect them to provide them same price appreciation as SVI in the next year or two but I do not see a sizeable retracement possibility either. It's great that the market allows for so many styles to participate and make money. If one can align their style to their temperament they tend to do well.

Please keep this thread going over time. I find value in getting updates on individual stocks even if while reading them I think. "Coulda. Woulda. Shoulda".


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## MrMatt (Dec 21, 2011)

How do you think they have an advantage over their competitors?
Particularly those who also offer a combination of on-site and container services?

I personally used Apple Storage, because it was close and that location was fully indoor and climate controlled.

Secondly, while they're growing, their losses are a substantial portion of revenue, when do you expect them to turn a profit?
Also a Price/Sales of 10 is REALLY steep.

I do however like this business, but only once it's cashflow positive at a reasonable valuation.


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## londoncalling (Sep 17, 2011)

MrMatt said:


> I personally used Apple Storage, because it was close and that location was fully indoor and climate controlled.


Indoor and climate control are one type of storage and come with increased operational costs. It really depends on what is being stored. However, your points on P/S and combination business are important factors to me. Indoor, outdoor and containers covers the majority of storage needs.


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## MrMatt (Dec 21, 2011)

londoncalling said:


> However, your points on P/S and combination business are important factors to me. Indoor, outdoor and containers covers the majority of storage needs.


Considering that even if they managed to hit a net margin of 50% (instead of the negative margins they currently have) they'd only be somewhat attractive, what is your investment thesis here?


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## londoncalling (Sep 17, 2011)

@MrMatt, if you are talking to me and about SVI specifically, I took a quick look(post #2) and passed based on the same rational you provided. I didn't need to dig any deeper than my initial glance to know it is not for me. The OP may, or may not, make out well on the stock as a trade which is what prompted my question regarding an exit plan. If you are asking the OP then please disregard.


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## MrMatt (Dec 21, 2011)

londoncalling said:


> @MrMatt, if you are talking to me and about SVI specifically, I took a quick look(post #2) and passed based on the same rational you provided. I didn't need to dig any deeper than my initial glance to know it is not for me. The OP may, or may not, make out well on the stock as a trade which is what prompted my question regarding an exit plan. If you are asking the OP then please disregard.


Yes, I was asking the person who purchased it, why.
They're losing piles of money, and even if they had a 50% net profit, they'd still be a bad buy IMO.

Realistically the OP has 4 posts, 3 are about this company.


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## Cheeter (6 mo ago)

MrMatt said:


> Yes, I was asking the person who purchased it, why.
> They're losing piles of money, and even if they had a 50% net profit, they'd still be a bad buy IMO.
> 
> Realistically the OP has 4 posts, 3 are about this company.


I can't say that SVI has a major advantage over other big players in the game. I think that any of the big players in self storage will see a steady increase in business. We won't see stocks in this sector skyrocket but my belief is that they will do good over time for the reasons that I stated in post #3 . I am new to the site so have not had many postings yet. I actually did post About Atlas Salt in Mid July, but I posted it in the wrong area so when I reposted it I was banned for spam and the post was removed. It has done very well since so I will give it another shot.


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## MrMatt (Dec 21, 2011)

Cheeter said:


> I can't say that SVI has a major advantage over other big players in the game. I think that any of the big players in self storage will see a steady increase in business. We won't see stocks in this sector skyrocket but my belief is that they will do good over time for the reasons that I stated in post #3 . I am new to the site so have not had many postings yet. I actually did post About Atlas Salt in Mid July, but I posted it in the wrong area so when I reposted it I was banned for spam and the post was removed. It has done very well since so I will give it another shot.


They're running at negative margins, and even at a 14% margin (which they are way off from) they're too expensive.


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