Q: All 3 down from their lofty valuations and probably more to come during tax loss selling. Please give your evaluation/opinion for 2026 and recommendation regarding investment strategies and would you add to position to take advantage of the opportunity. Also,please rank your preferences. Thanx.
5i Research Answer:
We would rank: PNG, ZDC, VHI
Strategy-wise we would be fine buying into further weakness, but with a close eye on position sizes. If the markets continue to sell off, small caps, as usual will find it hard to perform. PNG is debt free and new contracts can support it. EPS is expected to more than double in 2026. ZDC is still up 71% this year and may not see much tax-loss selling. It is expensive but EPS predicted growth is very high for 2026. VHI is very weak but is flush with cash and in terms of pure EPS growth it is expected to show the highest growth in the next couple of years.