Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on Rogers Communications Inc. (RCI) on Nugget Capital Partners’ Substack. In this article, we will summarize the bulls’ thesis on RCI. Rogers Communications Inc. (RCI)'s share was trading at $26.65 as of 9th June. RCI’s trailing and forward P/E were 11.27 and 7.73 respectively according to Yahoo Finance.
A closeup of a telecom tower with power lines connecting to it, representing the strength and reliability of network services.
Rogers Communications (RCI) appears deeply undervalued amid a telecom sector that’s fallen out of favor with investors, despite signs of fundamental strength and upcoming catalysts. Chief among these is the potential monetization of its MLSE (Maple Leaf Sports & Entertainment) assets—high-value holdings that generate no EBITDA but could be worth up to $15 billion, according to management.
Discussions with institutional investors are reportedly well underway, and while a full sale seems unlikely due to Rogers' NHL broadcasting commitments through 2038, an IPO or partial divestiture could unlock meaningful value. Coupled with the imminent closing of a $9 billion Blackstone equity deal that will reduce leverage by 1x EBITDA, Rogers is transitioning from the highest to the lowest leverage profile among Canadian telecoms.
Meanwhile, the sector shows signs of stabilization: ARPU is bottoming, pricing pressures appear to be easing, and the capex-heavy 5G buildout cycle is winding down, which may drive margin expansion.
Rogers, Canada’s largest wireless provider, also benefits from consistent subscriber growth fueled by immigration, with upside if a new government provides a clearer immigration policy. Trading at historic lows across EV/EBITDA, earnings yield, and price/book, the stock offers an attractive entry point with limited downside, especially given increased institutional interest and insider confidence.
While sentiment remains negative post-dividend cut, recent defensive performance during broader market sell-offs supports the view that telecom has likely bottomed. With improving fundamentals, a likely MLSE monetization, and reduced leverage, Rogers offers a compelling asymmetric opportunity in an overlooked asset class.
Previously, we covered a standout bullish thesis on Precision Drilling Corporation (PDS) from Nugget Capital Partners, which framed the company as a misunderstood Canadian rig leader with strategic basin exposure, pricing power, and high asset quality. Despite U.S. softness, resilient Canadian demand and strong free cash flow underpin the upside in a depressed valuation. The stock has appreciated by approximately 15% since our coverage.
