Q: Happy New Year 5i.
I want to add $14000 of Canadian small caps to the two TFSAs in my family. I'm looking at adding two of VHI, ZDC, MDA, and E in equal amounts. Can you rank them in order of preference with a brief explanation? Thanks.
I want to add $14000 of Canadian small caps to the two TFSAs in my family. I'm looking at adding two of VHI, ZDC, MDA, and E in equal amounts. Can you rank them in order of preference with a brief explanation? Thanks.
5i Research Answer:
In order of preference, we like: VHI, ZDC, MDA, and E.
VHI is expected to grow its topline nicely in the coming years, we like its serial acquirer model, and gross margins are strong. ZDC is slightly smaller, but has higher growth prospects, and we think its growing surveillance platform has long-term potential. MDA is not as small, but it is interesting as a unique company in Canada, winning big contracts. E, we consider as 'OK'.