Investment Q&A

Q: There are a number of Small/Mid cap stocks you have liked for a long time and there are others that have recently come into play.

Most of these companies have done very well over time and some have stumbled.

I own a number of these names and other than Goeasy and the negative momentum of software names I have done well…

However, having been bitten a little by some of these names I find it difficult to venture into new names like FLY, TSAT, MDA, ENS, ELVA and others given the almost daily volatility.

What portion of your portfolio would you feel is reasonable for Small/Mid cap names? And what are your key metrics when you review or recommend these small to mid size companies?

Given all of that what would be your top 5 new names you like in today’s market?

Thanks
Tim

Q: From your answer to Neil’s question yesterday: “We feel the key for investors is owning a mix of names across sectors, HALO, AI-HALO, and not chasing into the latest 'hot theme' with a large weighting, but taking a measured approach to names that have long-term secular tailwinds in growth industries.” For a new long-term portfolio (5-10 years+) could you supply the sectors you are referring to and a stock or two for each sector? Thanks!

Q: Is it too late buy HPS.A after the great run it’s had,could you tell me what tailwinds it still has for a 1-2 year hold and a2-4% position,as always thanks for the great service.

Q: HMM.A has come to life over the last couple of weeks. What is your current opinion of this neighbour of HPS.A?

Q: Hi, now that Hammond has done so well for me (thank you), I wonder if it's worth taking some profit and initiating a starting position in Elva? 3.5% position in HPS, but it's made me a lot, so I wonder about diversifying a bit. Thank you!

Q: Hi,

I try not to time the market and positions too much, but when you see a position run into earnings, for example HPS.A, would you trim? I have a 4.91% position and its been doing very well. For smaller or mid cap names that are more volatile, what % do you hold these names at vs a large cap core position? I'm thinking of trimming down to 3.5-4% before earnings, although long term I still like the tailwinds for these power companies. Thanks!

Q: Please rank this group for growth and risk over the next 2-3 years. Thanks for your great advice. Steve

Q: I have full positions in NVDA, NBIS and GOOG and do not need to add. For additional money directed at the AI theme, please suggest 4 US companies and 4 CDN companies to buy today and hold for 3-5 years. A one sentence explanation for each choice would be appreciated. Thanks

Q: I adhere to a portfolio construction strategy where 5% is a full position but I allow for a "rock star" stock like a SHOP, NVDA or GOOG, to go to 7% at which time I will trim a point or two.

When you suggest a small-cap stock, you often warn against buying too big a position initially, given the inherent instability and risk of a smaller company. My question is, at what point do you "loosen the reins" and allow that stock to assume a full position and when do you allow it to go to (in my case, for example) rock start status? I'm thinking of companies like ATZ and HPS.A. Is it based on capitalization, number of business cycles management has gone through, profitability ratios or is it as much art as science?

Appreciate your insight.

Paul F.

Q: What are your thoughts on Char Technologies? Too early to invest? What other small caps would you invest in instead for a 5-year hold?

Q: My recent answer for additions to my tfsa was to add the following firms: VNP, CLS,PNG, BN, & SHOP.
My question when written listed the above holdings as currently owned.
Could I have 4-5 other firms please?
Thank you David

Q: So brp goes down 35% because of tariffs.hps.a and tvk both down 8%.Should I add to my positions.

Q: Any reasonfor the 9.19% drop today after record H of $246.60 on Monday.AddHold or Sell. Txs for u usual great views & services

Q: Going forward, for a 3 year hold, do you like HPS.A or ZDC for growth. Thank you

Q: In regard to the question about Hammond Power this might help..... from TD this morning,

National Bank Financial analyst Baltej Sidhu thinks the simplified rules emerging from “significant” changes” by the U.S. government to Section 232 tariffs on steel, aluminum and copper will provide a notable “structural tailwind” for Hammond Power Solutions Inc. (HPS.A-T).

Shares of the Guelph, Ont.-based company jumped 15.3 per cent on Monday after the Trump administration announced updated guidance on those tariffs, clarifying how rates apply to imports.

“The updated framework introduces a tiered structure, with 50-per-cent tariffs on primary metals, 25 per cent on derivative products, and a reduced 15-per-cent rate on select metal-intensive industrial and grid equipment,” he explained. “Overall, the tariff calculations are simpler and transparent, and could be viewed as the administration working with the industry, in acknowledging supply constraints and the need to support ongoing U.S. industrial and grid buildout.

“While the 15-per-cent grid equipment category appears to capture HPS’ suite, we believe its transformer products are likely to fall under the 25-per-cent derivative category, based on product codes listed in the annex. That said, we view the revised framework as more transparent and consistent, replacing metal-content-based calculations with a clearer rules-based approach, which should improve confidence and create a more level playing field.”

While acknowledging the overall financial impact “remains under evaluation given the complexity of HPS’s input mix and broad SKU base,” Mr. Sidhu thinks the revised framework could “prove incrementally less punitive” for Hammond.

“Under the revised tariff regime, the effective burden may be more manageable relative to the prior structure,” he said. “There are puts and takes as the savings may flow through to the customer in maintaining relationships. Stepping back, the policy shift reinforces an already tightening supply backdrop for transformer equipment while supporting continued investment in grid infrastructure, leaving us optimistic that HPS can recover costs and sustain pricing.”

Maintaining his “outperform” rating for the company’s shares, the analyst raised his Street-high target to $235 from $220. The average is currently $161.

“While we have more clarity, we are comfortable with our current estimates, and believe the reaction in the shares reflect margin expansion of 100-150bps vs. our modelling of 120bps. Owing to the continued structural drivers, and increased confidence, we increase our target,” he explained.

Q: Good Morning
Cant seem to find a reason for the big jump in
HPS.A this morning and then a slide back are you aware of what may have happened?
Thks
Marcel

Q: Hello 5I
This stock seems to be in a down trend. Do you have any news and would you buy it here? Thanks. Cheers

Q: With the VIX above 30 and sure to continue to be volatile in the coming weeks, how would you advise investors to step into the current market? Can you provide a couple of examples of companies you would be buying into this volatility?

Thank you
Tim

Q: I have these small/mid caps in my portfolio for future growth. Any concerns with any of these? Please rank these for growth potential. I do realize GRID ZDC and ELVA are much smaller. Thanks Stephen

Q: Do you have a preference at this time between BYD, FTT and HPS.A for a long term hold.