Investment Q&A

Q: Hi 5i Team,

I was reading one of your recent responses where the idea came up that small caps are “long overdue” for a run. I’ve been hearing the same sentiment on CNBC and from other market commentators, so it got me thinking.

I’m not fully convinced that something is necessarily due to outperform just because it hasn’t gone up in a long time. I’m not sure how much of this is genuine opportunity versus a narrative around sector rotation. Large caps have treated me fairly well since I started investing, whereas my early experience with small-cap mining stocks was, frankly, a disaster.

That said, markets often move on sentiment and momentum as much as fundamentals. If enough people believe small caps are about to run, they often do — regardless of whether they’re truly “overdue.”

With that in mind, I’m curious:
If you had to narrow it down to five small-cap names to choose from for a potential small-cap run, which ones would you consider most attractive right now — either due to fundamentals, positioning, or momentum?

I realize Nike isn’t a small cap, but if I can’t get comfortable with a small-cap thesis, I’d likely just default to something like that. I’ve also wondered whether a beaten-down name like Krispy Kreme would qualify as a small-cap candidate with rebound potential.

In short, I’m looking for a short list of small caps that could realistically double or triple if the “small caps are going to run” narrative plays out.

Thanks, and I appreciate your insight.

Best regards,

Q: FYI I came across the reason for the drop in ZDC I thought you might be interested in - Amazon’s Ring Doorbell division announced a Ring Camera on a small trailer product yesterday at CES. After reading their operational update and a few analyst's "Takeaways" from this news, I added to my holdings as they are catering to a completely different market than Amazon and demand remains extremely strong. Below is the update and some analysts updates.





Operational update:

* Exit-Q4/25 service fleet had 2,783 towers (+18% Q/Q, and above our expected 2,711).

* Tower output capability now at 50 per week (for context, we have been assuming per week output of 30 during Q4/25, 45 during Q1/26, and 50 during Q2/26; this near-term path is already nicely de-risked).

* Currently moving into new/bigger manufacturing facility in Houston that will boost output capacity by ~50% (to implied 85-90 per week; for context, our growth forecast is based on 65 per week in Q4/26+, suggesting there are no capacity bottlenecks).

* Snowballing success with larger type of national/enterprise customers; a national contract has been signed with an existing major homebuilder client (enables quicker deployment of towers to satisfy their demand in more regions); also recently signed up a new furniture retailer that has 250 locations in U.S.; also have multiple trials/RFPs that are active with major new customers.

* Plans are in place to continue boosting regional presence in U.S., and the size of the sales team in both Canada and the U.S. where they see no shortage of demand; based on our recent chats with management, we think the exit-Q1/26 regional sales team (ex. national accounts team) will be >2x vs. the count that existed during the last reported quarter.



Takeaway: We think the update previews that Q4/25 results will beat expectations, based on the reported size of the fleet, and based on our recent chats about demand, utilization, pricing, and sales team performance. We also think the business momentum/capabilities being highlighted previews a need for Street forecasts to eventually increase (Street expectations for late-2026 and 2027 look low vs. Cormark estimates).



Addressing the Ring media headlines:

* Ring (Amazon’s video camera and doorbell cam platform) revealed a new product launch yesterday and it triggered weakness for ZDC’s stock, but the product does not overlap with the market and demand that ZDC is addressing.

* The new Ring product is a video camera on a mobile and self-powered tower (12 feet high); Ring will sell the tower equipment to customers starting at a cost of US$5 K, and buyers can self-deploy the tower unit wherever they want; footage is stored and the owner of the tower can also self-monitor the video as desired (or get a non-Ring, third-party to watch it for added/undisclosed fees); it’s essentially like a doorbell cam, but a more expensive and mobile version used to see small areas.

* In contrast, ZDC does not sell any hardware (does not even rent any hardware); ZDC sells a comprehensive service (real time, live monitoring and response services covering large areas, with the service delivered using ZDC’s own hardware and monitoring staff; even the hardware ZDC is using is very different / 2x size / costly vs. the product Ring is selling).

* There is an existing and crowded market for this type of new Ring product, with many small companies offering it (for many years, especially in the U.S.), but it’s not a market ZDC has been, or will be, involved in.

* We also note that Amazon itself continues to use ZDC’s service, including consuming more of ZDC’s fleet capacity as recently as yesterday at more of their distribution centers (with more orders expected beyond yesterday’s deployments).



Takeaway: The Ring headlines should have zero impact on ZDC’s financial profile momentum that will ultimately power ZDC’s stock price; we think this is a brief trading-type selloff, and a continued selloff is a stock buying opportunity given the setup of standout growth, room for forecast increases, and valuation that still has room to expand (stock trading at mature/low-growth <15x cash EPS vs. our modelled exit-2026 run-rate, a point in time that should be no where close to maturity for ZDC’s growth curve).





This morning, ZDC provided an operational update and its strategic growth roadmap for 2026. Impact: slightly positive.

Fleet growth. The MobileyeZ fleet grew 108% yoy and 18% sequentially in 4Q, reaching 2,783 towers as at 4Q25 vs our estimate of 2,819; 52% of the fleet is now in the US (higher vs our estimate, demonstrating US expansion efforts). The company is also significantly building out its salesforce and its national account sales team. Recall that we model a fleet of ~5,000 exiting 2026 and ~7,700 exiting 2027.
New wins. The firm has secured new customers and expanded tower count with existing clients within the home builder security market. Enterprise sales efforts have made significant progress, with the signing of national account paperwork with the largest US homebuilder, an existing customer. Additionally, ZDC committed towers to a large US SE furniture retailer with 250+ locations and meaningful capacity to deploy more towers. ZDC is actively supporting trials for multiple large enterprise retailers while in advanced stages of RFP processes with some of the largest companies in the US.
US geographical expansion and growing sales team. ZDC has expanded its geographical footprint with service centre locations in the US Midwest and Northeast. In addition, ZDC is aggressively growing its sales team in 1Q26 in both Canada and the US, as well as the national account sales team, as it looks to expand into new industry verticals and regions.
Weekly production. It reached 50 towers/week, with production continuing to grow with capacity (is also slightly ahead of our forecast).
New Houston manufacturing facility and monitoring centre. ZDC is moving into its new Houston production facility in 1Q26, increasing its manufacturing floor space by 50%. While current capacity is 50 towers weekly, the new facility provides the ability to significantly expand its footprint and support additional enterprise customers. In addition, ZDC has finalized a lease for a 15,000sf monitoring facility in Houston to support its growing operations and deliver uninterrupted security services. The centre is already staffed, with additional room available for future expansion.
Our take on Amazon Ring entering the commercial market. While this presents a negative headline risk, it does not deter us from our robust growth outlook expectations for ZDC. Our understanding is that the product offering is mostly hardware-led, catered toward more DIY and price-sensitive customers, with minimal servicing. Most importantly, there is no live 24/7 monitoring (or will need to hire a third-party firm). We note that Amazon acquired both Ring and Blink back in 2018, demonstrating a buy vs build preference.

Q: In the past month ELVA has doubled. Why?

Has it run ahead of itself that is quite an increase in a very short period of time.

Should one wait for a retracement?

Thanks

Sheldon

Q: Hi Peter and team,

What would you attribute the drop in GLXY's price since November 2025 to? Was it profit taking or something more fundamental? Do you see it as a hold, sell or buy ?
Thanks,
Harry

Q: Is it possible that yesterday's announcement by Amazon of their entry into Zedcor's market causing the spike down?

Q: Hi team,
I read the zdc update this morning and thought it sounded great . Then the stock drops like a rock…what did I miss? What’s your take on the dip and company update ?

Thanks ,
Shane

Q: Hi 5i Guys, Could you please rank the noted stocks in order of your expected growth in the next 3 + years? Thank you!
Happy New Year!

Q: What would be your top five stock choices to add to a TFSA today, regardless of sector and geography? Thank you.

Q: Hi Team,
I am looking for a tfsa candidate to play the secular growing demand in the north American electricity grid. Would Grid fit the bill here? The company seems to be doing well, and with a smaller 240mil market cap it seems that there could be multi bagger opportunity here over the next decade, would your agree? If you do not see Grid as a top pick today, do you have a couple alternative suggestions for a high conviction growth stock for this years tfsa contribution?

Thanks,
Shane.

Q: In the growth portfolio, could you list the companies you would add to in a TFSA from highest conviction to lowest. Maybe six of them,

Q: I hold small (less than 1%) positions in VNP and GRID. I would like to beef up the size of my holdings or sell and redistribute the funds into other positions. Would you put more money into VNP and GRID, combine the two into one holding of either VNP or GRID, or reallocate the funds. Thank you for your help with this.
David

Q: hi, and hopefully Happy NEW YEAR!
I am down ( with percentage in brackets ) on the following Canadian equities:
CSU(13), ENGH(41), FSV(9), GLXY(31), LMN(17), NPI(40), PRL(12), SRAD(19), T(24), TRI(25), VHI(19).
Which stocks (if any) would you be comfortable adding to at these current levels, and please rank best to worst.
cheers, Chris

Q: Hi,
You’ve mentioned a lot of small caps that have already had significant growth in share price. What are some small cap names that have not yet landed on everyone’s radar?

Q: I recently decided that this drone firm was worth a roll of the dice. Drones are clearly the weapon of the future as we're witnessing in Ukraine. Canada needs to get up to speed with this technology and according to the corporate marketing blurbs it is supposed to be happening, although at a choppy pace. I know it's a small cap with the inherent risks. What do you think? Can the Federal defense dept. get their act together and help to nurture this important industry sector?

Q: I have 12 thousand to add to my tfsa what stocks would you recommend.

Q: I'm looking to clean up some of my TFSA and would like to get your thoughts on the following to either buy more, sell, hold: ABNB, TTD, PRL, LULU, CLBT, RS, PNG, JPM, LMN, AEM, BKNG, ATZ, AMZN, INTU, AXON, WSP, GOOGL, NVDA?


What are a few other CAD/USD growth stocks you would recommend that are not listed for a long term hold? Thanks.

Q: How would you rank these? I hold all 3 and am thinking to sell OGI into either SNDL or GTII. I'm bullish on US cannabis in 2026 with 280e being removed after schedule 3 gets implemented and I don't see OGI as having many assets there. Are there other names with US assets that you prefer?

Thanks

Q: Do you feel OUST makes sense as a speculative add now?

Q: Hello 5i, Happy New Year to all!!
Could you rank these high risk stocks for growth over the next 2-3 years?
Which would be your top three picks.
Thank you
Dave

Q: All different in varying degrees. Please rank in order for best return 5-10year hold.

Thank you as always!