Investment Q&A

Q: Looking for steady growth. LMN or GIB.A ? Thank you

Q: Please ranks these stock for risk from US Tariffs from High to Low.....Tom

Q: As one of 5i’s early subscribers, I find it a useful thought experiment to give my answer to a question before clicking on the 5i answer. I have found over the years our answers converge and so I rarely send in questions and comments. However my sense is that DeepSeek is a significant change.

On one level it is a clear lesson in the reality that, as Keynes said many decades ago, it’s real resources that matter, not money.

The American approach to AI development was that if you don’t have a $1billion you're not in the game. The Chinese have shown that if you have the pool of talent, amazing things can be done with relatively little money. The prevailing narrative that the Chinese are just copy cats was also blown out of the water. DeepSeek not only upends every assumption underlying the American approach to AI, it shows that the Chinese can out Silicon Silicon Valley and that means that, unlike in the past, China’s most talented minds will want to work for Chinese companies not American ones.

How will the Americans respond? Having staked political capital on the $500 billion Stargate, Trump and his entourage of billionaires have no choice, they will double down. We are hearing the narrative already, they are now saying that $500 million invested in DeepSeek’s advancements will produce even more amazing advancements in AI.

At a moment in history, as America consumes itself, China has taken a leap forward. Not only have they bloodied Trump, they have shaken the world in ways Napoleon could never have foreseen.

There are actually lessons to be learned in how Canada might deal with Trump but the political bobble heads and corporate Canada have actually come to believe the myths of neo-liberalism they started purveying in the 80’s, and are now incapable of rising above their paralysing fear.

Every investor has to ask, what are the implications of DeepSeek for their investments? Doubling down by the Americans will keep the party going for a while but it seems reasonable to expect a reckoning. Where would 5i look for alternatives to AI investments? Please suggest 5 US and 5 Cdn stocks that have strong balance sheets and reasonable growth prospects (without stretched valuations) that would benefit from using much less expensive AI? Also, please suggest a couple of ETF’s for Europe and China that would benefit should those markets surprise to the upside?
Mike

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: Thank you for the core ideas in aprevious portfolio question.

Would you please provide a buy range on GIB.A. I'd like to average in and obviously it's been climbing thanks to the sector overall.

Should I just initiate my full position at its current valuation?

Thank you.

Q: 5i,

My Taxable Account is CAN only 3 months old. I'm lucky enough to restructure my entire portfolio these past few months for some optimization.

The goal outperformance of XIC. Large and midcap growth primarily. Core moat players as well. I'm shifting back to a more concentrated stock portfolio.

I add underperformers and cyclicals for boosts outside of my core. ie: NTR, TD, LUG
thus far this year.
Core by weight;
CSU, TFII
DOL, DSG, SHOP, WSP
BN, CNQ, STN, CLS, TRI
TVK.

Outside of materials, gold; no retail; no reits. If this was you. Do you add a company that doesn't meet your growth expectation/debt/cash flow etc for balance ie ENB.
Or add to your current.

Looking for your sage advice as well as 2 potential core additions or adds and 2 other high conviction torque. No parameters.

Thank you!

Q: Doing my semi annual balancing. Have some money to add to one, two or all three of the named companies. Looking at a 3 to 5 year time frame, what would you suggest. (With your thoughts on the subject)
Thanks. ram

Q: I'm asking for 5i's opinion on your current (5) best asset-light company ideas - Canadian and / or American - that have:

- financial stability

- strong competitive position today and into the future

- in a sector that is not threatened by disruption

- attractive valuation at today's prices

Hopefully not a lot to ask. Thanks for your service.

Q: Operating metrics (FCF, ROE, margins, etc.) for PAYX seem quite strong - it seems to be an asset-light business, dividend grower and compounder. However, it's at the same price as 3 years ago and has been underperforming the S&P for the same period. Am I missing something? What are your thoughts for PAYX and is it worthwhile for initiating a position at some level you would suggest?

Q: Hi - do you have any concerns about CGI's growth with US Gov't contracts once the Dept of Elon/Vivek starts to cut "costs"?

Q: Please rank the following for purchasing (10years +)
Thanks

Q: Hi Guys

Thanks for all the amazing work you do to support us investors. Putting new money to work and looking out on at least a 3 year (tend to be a buy and hold investor) which of the four stocks would you buy today looking at total return? If you could rank them from your most strongest being 1st that would be great.

Thanks

Stuart

Q: Hello Peter,

At times you have stated "turnarounds seldom do" and I look at the future prospects of our Canadian economy thru that lens if the current gov't remains in power.
Could you list the sectors (and co's) that would be indifferent to and thrive in an imbecilic fiscal environment?

Thank you

Q: I have a general question and am using CN Rail and CGI as examples.

These 2 companies have an average annual sales growth of less than 5% per year over the course of the last decade and their EPS is higher. In the last 5 years the average EPS growth has been in the double digits and their average sales growth less than 5%. I know they buy back shares every year but this can not account for such a large variance. I know they try to be more careful with expenses but you can’t cut expenses forever. You would normally think that EPS follows Sales (to some extent over the years). I know you like these companies and have a few questions.
1. Any idea what is behind the variance between sales and EPS. (Mid to low single digit sales growth and double-digit EPS growth.)
2. Considering such a variance, if average sales growth remains under 5% can these companies continue to compound our return in the double digits over time. Why would they continue to be good long term investments?
3. Anything else that may be worthwhile sharing.

Thanks.

Q: What would be your favourite 3 Canadian tech stocks that have consistent growth potential.

Thanks Tom

Q: Please comment on CGI results. Did they beat expections?

Q: Could you compare these two for a 2 to 3 year hold and do you prefer one over the other? Thanx.

Q: I plan on adding to two of these companies for a 3 to 5 year hold. Please give your rankings from best downwards (with a few comments as to your reasoning)
Thanks. ram

Q: Hello,

My son has saved a bit of money and expressed an interest in equity investing.

He does not value, yet, the value of "paid for" advice and has selected 5 stocks his friends have suggested.

I would appreciate the names of 4 or 5 stocks from the growth portfolio that are currently out of favor or have significant runway.

Thank you

Q: Hi Team,

What are your thoughts on the company's current valuation and it's future prospects?

Do you believe this could be a long term compounder? Would you be comfortable buying it here?

Thanks,