Investment Q&A

Q: Hello 5i Team,

Given the current pull-back in the market, could you please provide your 6 highest conviction Canadian or US stocks (ranked in order) for (i) small-cap, (ii) mid-cap, and (iii) large-cap companies considering a 3+ year hold.

Thanks in advance for your always helpful advice!

Q: Hi,

Hopefully this question is general enough to not be considered personal advice!

I've done very well with Zedcor and Kraken (thank you!). You often mention their high valuations. I wouldn't mind taking some profits to put elsewhere.

Given the recent sharp decline (especially Kraken), would you say it's still richly valued enough to sell a bit? Or might it be better to wait for a rebound, given its volatility?

Q: Good day,

Wild few days in the market. As a stroke of luck, I transferred one of my managed accounts over so I could manage it myself, and that sale happened early last week and it is sitting in my account, ready to deploy. As a lucky tailwind, I don't want to squander it. Mostly in RRSP account.

Would you be adding to CLS, BAM, SHOP, TVK, PNG, ZDC right now? In order of priority please with a small 'why'.


I had purchased some AEM 1-2 years ago (great recommendation, thanks), and it has flown. Is it an add now and/or are there other Materials tickers you would suggest? Doesn't have to be precious, as long as they are executing well and have quality assets and a solid runway. maybe 1-2 each for precious, critical, and non-precious?

I sold TOI last summer, and with this crazy "Software off" cycle here, would you start accumulating? like 20 or 25% of a position? Is TOI the most likely candidate to return to its growth trajectory when the world begins to appear normal again?

Thanks for Everything!

James

PS. While looking at all my statements while transferring over to Questrade for their cashback promotion, my statements had my annualized returns calculated over 1 3 5 and inception. Since inception was 21% which I'm staked about, but my 3 year annualized was 43% !!! I just renewed my 4th year with 5i. Thanks Thanks THANKS!

Q: What are your top 3 choices in your growth portfolio. Please give rationale. Thanks Stephen

Q: What handful of small to mid cap companies do you see as having home run/Palantir type potential? I don’t care what exchange the companies are listed on. I’m willing to be patient and realize your picks are purely speculation.
Thanks

Q: Hello, I know 5i like the above and they have some good momentum lately, can you rate these going out for the next 3 years. Thanks as always,

Q: Hi,
I am interested in starting positions in CLS, ZDC and GRID. Do you think their current prices are a good entry point? And for CLS, I see they are expected to report earnings at the end of the month. Would it be wise to wait for that?
Thanks

Q: Which company HPS.A or ZDC has the most growth/risk going forward?

Thanks for your service!

Q: Greetings,

ZDC

1) The inclusion price into the 5i portfolio was $2.15 so congratulations on that pick!
However, has ZDC run out of steam or would you say it's temporary?

2) Do you think inclusion into a 5i portfolio immediately adds momentum to a stock?

3) Am I missing something but it seems to me, the company is a "one trick pony" with not much of a moat. What's the appeal here?

Many thanks!
A

Q: Hi, Just a follow-up to a recent ZDC question from yesterday. I noticed on this site that the 'Consensus EPS' of ZDC has gone from a '90 day estimate' of .09 to a 'Current' estimate of .06 and observing the 30 day and 7 day has also ticked down. This is for FY 2026. I assume this is revised analyst estimates and curious what might be behind the down tick.
I do own the stock at a 3.5% position. Did they not get an expected contract(s) or it was pushed out? Or it is increased material costs for their towers?
Just curious if you could explain and/or if this apparent revision changes your opinion going forward. Your last comment indicated to stay the course.

Cheers,
SteveM

Q: Hello Team,

Can you please rank the below companies based on long term growth over the next 3 years.
No need to worry about size/industry etc. Looking at deploying some cash.
Thanks.

Q: Hello,
What is driving the surge in Kraken Robotics? Also, would you split monies for both stocks or what percentage should one allocate to each assuming i had 10k to invest? Lastly, this is a general question. How do the ETF providers buy so many stocks in an ETF and maintain a low fee structure? Much appreciate it.

Q: I was just sent this update on the recent ZDC action from a fund manager that follows (and is a shareholder of) ZDC. I thought you might be interested. Feel free to publish it if you think it would be of value to your members.

After a total senseless decline in ZDC shares, let me summarize it for everyone following the group investor call yday. Sidebar, insiders are buying stock and the first filing hit this morning. Mgmt and board all intend to buy more shares. You want to bet against a company that has beaten consensus eight consecutive quarters?



Ring's tower is an off the shelf, hardware offering with no service, monitoring, or installation. It's a Chinese camera, no analytics, no infrared. In fact, it's half the height of the ZDC tower, so it was clearly not designed for large scale commercial, where ZDC is focused. Meaning ZERO overlap.
Amazon now has 20 towers with ZDC and ZDC is the ONLY tower provider to Amazon. In fact, Amazon took two more towers THIS WEEK.
ZDC now has MANY enterprise customers with towers and awaiting orders. Kruger, Home Depot, Circle K, Seven Eleven, Amazon.
The Kroger contract with LVT expires on Jan 31. All indications that this should be ZDC's contract. What happens if you wake up tomorrow to 500-1000 towers ordered by Kroger? The stock would be back at all-time highs in my view
the company was very explicit that they will use the balance sheet this year to fund growth and will be expanding the credit facility with the established accordion. No equity bailout for anyone. Leverage never gets above 2.5x
the stock is trading at 8x 2027 EBITDA for a company growing EBITDA 100% YoY. The most recent takeout in the space was Guarda buying Stealth last year for 21x FY1 EBITDA versus 13x 2026 for ZDC
Simple supply / demand: after the washout yday, 30 investors met with mgmt. ZDC has one of the best registers I have seen for a small cap and many more large LO buyers in the weeds. I am certain that I know who will win the showdown. The AUM for these funds dwarfs the AUM of hedge funds and retail.

Cheers

Scott

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: 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: Do you see any news to account for the steep drop today (now 9%)? Are you still ok with it?

Q: Based on your prediction that small caps may do better than large caps in 2026, which of the above do you think are ready to giddy up ie: best chance for a 12 month return > 15%. Thank you

Q: Hi Group please give me your top 6 sectors for 2026 (in order of preference please. Also can you give me you top 2 picks for each sector also in order of preference Lastly too late to buy gold and silver and copper what is your top picks in Gold and silver as well please assuming you recommend buy at this late date...thanks

Q: Everyone, On December 9th, i asked a question on multi baggers and you supplied the list stated above. I am now deciding - What rationale do i use to pick from the list? Is it 5 or 10 and which 5 or 10? My thought is to choose them all. Your thoughts would be appreciated. Clayton