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Constellation Software Inc. (CSU $2,552.51)
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Topicus.com Inc. (TOI $101.59)
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Lumine Group Inc. (LMN $22.00)
Q: I don't think I've ever started a question with an apology, but sorry I'm bringing up these companies again.
I've read your Q & A's BUT I feel with the constant and dramatic fall of all 3 of these companies during a tech boom for tech stocks something else is amiss.
CSY -21% YTD (back to 2023 levels)
LMN -18% YTD (back to 2023 levels)
TOI -17% YTD (back to 2024 levels)
I could go on with
DSG-10% YTD
KXS-16% YTD
What is this telling you?
Should we not be buying CDN tech stocks. When looking for tech and healthcare just buy US?
If we hold these and are still positive should we just sell to prevent a loss?
Not sure what to do here. Waiting is soooo painful.
Thanks
Sheldon
I've read your Q & A's BUT I feel with the constant and dramatic fall of all 3 of these companies during a tech boom for tech stocks something else is amiss.
CSY -21% YTD (back to 2023 levels)
LMN -18% YTD (back to 2023 levels)
TOI -17% YTD (back to 2024 levels)
I could go on with
DSG-10% YTD
KXS-16% YTD
What is this telling you?
Should we not be buying CDN tech stocks. When looking for tech and healthcare just buy US?
If we hold these and are still positive should we just sell to prevent a loss?
Not sure what to do here. Waiting is soooo painful.
Thanks
Sheldon
5i Research Answer:
It's not just Canadian tech. US software (outside of the mega caps) has had a similarly tough time. In most cases this drawdown in our view is not really fundamental related and more around concerns with AI. Unfortunately, drawdowns related to sentiment and investor appetite are hard to know when they will find a bottom but we think we are closer to a bottom in a lot of these names opposed to 'further'.
If an investor is loosing sleep over certain names, one could always trim the names in question to reduce the weightings and return to them when better momentum has returned. This can help reduce investor anxiety and limit the risk of selling at the wrong time or when under stress.