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Canadian Natural Resources Limited (CNQ)
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Shopify Inc. Class A Subordinate Voting Shares (SHOP)
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Constellation Energy Corporation (CEG)
The trend from past performance for CEG looks quite good. How heavily dependent is CEG on AI demand?
Thank you for your valued insights.
CNQ has held up well over the past few years, it has a nice yield of 6.4%, and forward earnings estimates are strong. Estimates have been trending higher, and we would be comfortable buying or holding for a long-term position. CEG has forward earnings estimates in the 8% to 12% growth range, and forward earnings estimates have been trending higher. Margins have expanded nicely, and we would be comfortable holding or buying here. SHOP has been a strong Canadian tech performer over the years, it has had margin issues and periods of slowing growth in the past, but management has been able to navigate well and we see the company on the right track moving forward. We like its growth rates, its margins are growing, and while it is not cheap (54X forward earnings), we think it can grow into this multiple. We would be comfortable holding here, and for investors that can tolerate volatility, we would be comfortable buying here.
CEG is dependent on AI demand, and to a higher degree than its utility peers, but we still view the long-term trend of increased energy demand from AI workloads as being intact.