Investment Q&A

Q: I would like to establish a position in the cyber-security sector.

Do you think a basket (ETF) approach is better or a focus on individual companies?

If the latter, please recommend your top 3. Also, are there any small-to-mid cap options that you like here.

Thanks as always.

Q: I'm curious to learn more about evaluating valuation metrics such as fwd P/E and P/S when analyzing a company and its expected growth rates. You often mention that a company is trading at X fwd PE which is cheap or that it is expensive. How do you know this and what exactly does this mean in the context of looking at its rev and earnings growth rates? You often say if the E or S is rising faster than the P, then yes, over time the valuation can come down quickly with the stock rising fast as well, just like how NVDA has done over the last few years. I've heard maintaining a +30-50% growth rate is very hard over a long period of time and not many companies do it and growth rates will slow down.


For example, lets quickly compare PLTR vs CRWD vs VRT over the next few years:

PLTR shows 173x PE and 54x PS.
Rev growth is 25% and 22% for 25/26
EPS growth is 26% and 21% for 25/26

CRWD shows 99x PE and 21x PS.
Rev growth is 28%,21%,21% for 25/26/27
EPS growth is 21%,26%,25% for 25/26/27

VRT shows 34x PE and 5x PS
Rev growth is 18% and 14% for 25/26
EPS growth is 32$ and 25% for 25/26

Looking at these numbers, PLTR is by far the most expensive valuation wise and WAY above any other software name in the universe. So at the current valuation of PLTR, what kind of rev and eps growth rate does it have to maintain in order to justify this valuation? What is the relationship between the fwd PE/PS vs the EPS/Rev growth rates and how do you analyze this? Any color you can add to this would be great, thank you!

Q: Do you prefer CRM or NOW. It seems CRM is down in sympathy with NOW results. Were they really that bad? CRM trailing PE is almost 30 but NOW is much higher I believe. I have sold half my NVDA with the idea to move it into the next phase of AI adoption, software. Am thinking one of these and perhaps PLTR. You have much posted on it, any information you could add regarding buying it, would be helpful. Any other software companies you would consider? Thank you so much.

Q: Hi,

Looking to replace NVDA and VRT. I wish to avoid the AI theme and Mag7. Do you have an handful of tech alternatives to suggest in the US?

Many thanks.
Michael

Q: Hi there,

If you were to create a US Balanced Equity Portfolio using CDRs only, what would it look like?

Thank you!

Q: Are large (but not giant) tech companies at risk of being competed-out by the trillion plus tech companies? With their high multiples, is the growth case still there in 2025 and going forward?

Q: Further to Stuart’s recent question on European defense spending, I’m also interested in the security theme. I recently purchased Axon in the belief police spending will be ramped up going forward. Do you have some suggestions for me to investigate in the areas of security/defense for the following: police, computers, military. Perhaps a couple of companies in each area as your top choices. I realize you have covered companies such as Raytheon extensively through the years but this theme hasn’t been on my radar until recently. Unfortunately, it seems to be increasingly significant going forward.
Thanks so much for your guidance in these challenging times.

Q: I have the above tech stocks sitting at just over 30% weighting in portfolio. Could you please rank them as to which you might sell first. I sadly sold Crowdstrike last summer when they had their issues and I am thinking I need a cybersecurity stock. Would you buy Crowdstrike or Palo Alto or half of both. Also, What do you think about Saleforce? With the thought of cheaper AI, is that one that would possibly benefit and how where would it rank within my aboce tech stocks? Thanks for all your help. With all your advice, last year was awesome and still up this year following yesterday’s falloff.

Q: I own small (2-3%) positions in Snowflake, MongoDB, and Datadog. Would you currently hold these stocks or sell them? If sold, what are some possible replacements in the tech sector?

If I were only to sell one, which holding would you let go of first and why?

Thanks.

Q: I need to consolidate my tech holdings:I own NVDA, AVGO, VRT, CRWD, MSTR, AMZN, META and IYW (about 3% for each holding). Which stocks should I sell and why- for a long term hold?

Q: Can you rank the following stocks best to worst please? Thanks

Q: I need to consolidate some of the riskier stocks in my portfolio. Of the following on my chopping block, could you rate which would be keepers for the long term (with a hands-on approach) - best to worst - KSI, GLXY, AVGO, AXON, IESC, ROAD, COIN, APP, CRWD? Also, I hold both GSY and PRL. Is it reasonable to let one go in a consolidation? If so, which one - thanks!

Q: Happy New year 5i!

It's been an interesting start to the year, and I've been watching/reading things that seem to be leaning towards or preparing for a 'fearful' period. Thoughts on this? With deployable cash, would you be getting it in the market quickly, or not be in any rush?

That being said, AXON and CSU have all seemed to back up more significantly than they ever have, and CRWD as well with the exception of the update failure event. IESC, PSN, and MU as well trending lower.

I hold none of these and have some USD free for 2 half, or 1 full position. Would paying the FX to get CSU on sale be your top pick? of the ones mentioned, would you rank them in terms of expected growth over the next 1 - 5 years? please add a 3 or 4 more options in there as well if you have other top picks. Small caps are good too.

I currently hold GOOG NVDA AMZN MSFT POWL ISRG CLBT VRT on the US side.

I don't mind managing holdings in a shorter period of time if needed, but aim to find those long term compounders and let them continue to win.

Thanks for everything!

Q: Greetings 5i, for each of these 2 companies, what is the maximum percentage of the portfolio to which YOU would be comfortable letting them run. Thanks!

Q: Happy New Year! I like investing in themes (aging population, infrastructure, internet retail, water, security ect) and am wondering if you have 3-4 thematic stock suggestions that you think are interesting here. So ya know, I am chock full of AI names at the moment as you might guess. Thanks

Q: I have made some updates to my portfolio before heading into the new year and am looking for your thoughts on total portfolio. I have it all in TFSA and am 28 years old with a long time horizon. Could you give me your opinion over next 1, 3, 5 years of portfolio.

What changes might you make to this portfolio to stengthen it?

Portfolio Breakdown:
Stock Amount Invested (USD) % of Portfolio
NVDA $6,500 12.04%
SHOP $2,840 (converted from CAD) 5.26%
AMZN $2,650 4.91%
MSFT $2,520 4.67%
MELI $2,483 4.60%
PLTR $2,250 4.17%
TSM $2,000 3.70%
CRWD $1,830 3.39%
GOOGL $1,780 3.30%
TTD $1,767 3.28%
ISRG $2,180 (converted from CAD) 4.04%
META $2,150 (converted from CAD) 3.98%
BRK.B $1,470 2.72%
AXP $1,560 2.89%
LLY $1,500 2.78%
DIS $1,280 (converted from CAD) 2.37%
NBIS $840 1.56%
CELH $700 1.30%
SMCI $392 0.73%
SPCE $188 0.35%
XRP $120 (converted from CAD) 0.22%

Thanks,
Dan

Q: I pulled the chute in the summer of '24 when they had their outage issue. The stock peaked at $390 USD last year and is now back to $360. Is the coast clear? Your views for 2025?

Q: What are your favourite cybersecurity stocks these days? Thank you!

Q: The 6 stocks are down from their peak
Which of these would you buy at today's price and in what order? Can you order them in terms of growth potential for a 5 year hold and also for risk. Thanks

Q: I have these companies in equal amounts in my TFSA.With an additional $18k to invest,which ones would you add to at this time or would you prefer others. I am 74 and plan to live to be 100,which is my mother’s age! I hope to eventually shoot my age(golf).
Thank your exceptional advice and Happy New Year,