CGI's NAV Lags Benchmark Despite Strong Share Price Gains
Event summary
- CGI's NAV per share at June 30, 2026 was $86.97, with YTD and 12-month returns of 8.6% and 25.3%, respectively, trailing the S&P/TSX Composite Index's 11.2% and 32.9%.
- Leverage stood at 12.4% of net assets as of June 30, 2026, slightly higher than year-end 2025 but lower than mid-2025 levels.
- Share price returned 12.6% YTD and 38.2% over 12 months, significantly outpacing NAV performance.
- Top holdings include Celestica Inc. (5.5%), NVIDIA Corporation (4.7%), and Franco-Nevada Corporation (4.2%).
The big picture
CGI's share price outperformance suggests investor confidence in management's strategy, but the lagging NAV raises questions about portfolio efficiency. The company's sector allocations reflect a bet on cyclical industries, which could face headwinds if economic conditions shift. With leverage modestly increasing, CGI must balance risk and return in a market where benchmark indices are also strong.
What we're watching
- Performance Discrepancy
- How CGI will address the gap between share price gains and NAV returns, particularly in a market where leverage is moderating.
- Sector Allocation
- Whether CGI's heavy exposure to Industrials (22.8%) and IT (18.5%) will continue to drive outperformance amid sector volatility.
- Leverage Strategy
- The pace at which CGI adjusts its leverage ratio, given the recent slight increase despite broader market conditions.