I don't know much about these names but am thinking about investing in one or both, so a few questions to get me started and please deduct as you see fit.
You were asked this morning if SHOP's entry into the POS arena would affect LSPD, and I have the same question, but with respect to NVEI - will SHOP be competing with NVEI in that area?
I think tech may be getting ready for a turn around. Do you think that conclusion is justified by the facts on the ground so far as they are known and, if so, are either or both of SHOP and NVEI likely to benefit given their current prices or, put another way, are they at good entry points?
Does it make sense to own both, or better to take the $$ that would be split between them and go all in on one? If so, which one?
Thanks.
Peter
We feel that NVEI's operations are diversified enough that while it may see some impact from SHOP's entry into the PoS area, its strengths will allow it to persevere. There may be increased competition from SHOP for NVEI, but we also see the two companies as being complementary in some ways as well.
Tech has certainly been turning around, and both valuation expansions and positive earnings revisions are beginning to take place. We feel that the Canadian tech landscape can continue to perform well throughout the next few years, and it is one of the leading sectors in the market so far this year. For a long-term position we would be comfortable with NVEI and SHOP at today's levels.
We feel that there is enough diversification between the names that it makes sense to own both, however, we would place greater emphasis on SHOP due to its strong market position, larger size, and stronger foundation.