Investment Q&A

We like CLS a lot, and have a large weighting in our Growth Model. It is also far cheaper than SHOP. BUT...overall we would side with SHOP. It has more of a 'moat' in our view, and its growth is likely to be far less cyclical. CLS is booming with AI growth right now, but historically as a manufacturer it has shown high cyclicality, lower margins and a higher degree of volatility in earnings. SHOP, meanwhile, has a global market in a largely duopolistic industry position, lots of cash (CLS has some debt) and very high expected growth. They are different, but SHOP is more likely a long term keeper, in our view. There are higher growth tech stocks (NVDA for example) and software stocks such as DSG which still look good but CLS/SHOP we think are certainly up there in terms of solid stocks for the Canadian market.