Jordan Zinberg

Small caps are trading at a massive discount to large caps which gives investors an amazing opportunity in Canada and the U.S. Volumes are ticking up which means institutional investors are getting interested. Investors looking for growth have the best opportunities in small caps trading at low valuations. He is finding companies growing at 20, 30 and 40% per year but still trading at single digit P/E multiples. Small cap opportunities are in many sectors, not just tech and there is new leadership in the market. In Canada he considers a micro cap to be under $100 million, a small cap to be $100 million to $2 billion, and a mid cap to be $2 to 5 billion. Anything over $5 billion is a large cap. The U. S. is different - those numbers would be much higher since the markets are bigger.

It is a digital health company. The CEO ran a previous company which did very well. Well Health did well during Covid and made a lot of acquisitions, but hasn't done well since Covid. He is not interested because of lack of profitability and ROC is not as high as he is looking for. He respects the company which has done a good job on the topline but needs a better bottom line. Analysts seem to like it since they make lots of money from it. 

The question was on picking sectors and then stocks, or picking the stocks first. Top down investors look at the macro environment to find the sectors and then look to individual stocks within those sectors. Bottom up investors look at specific opportunities (stocks) and choose ones that fit best based on their criteria. He is in this group. The great investors over time are mostly bottom up stock pickers. He hopes to own a company over a long period of time but watches for slowing growth and an expensive valuation. He looks for increases in his investments of 2 to 5 times. 

It is executing well and the stock is cheap. It is a bit out of favour with no near term catalyst for buying right now. It has a great management team and is in a good sector. The volume of machine rentals out to homes is increasing.

It is one of his favourites with a fantastic business model, a very good core business and ROC, and trading at 8 or 9 times earnings. It is good for Uber drivers and others in the gig market since they can access their money quickly. The gig market is growing at 30% per year. It is not well known but there are lots of catalysts coming. It may move outside the gig space. For example it may start to provide fast access to capital in the fast food industry meaning that workers can access their money right after a shift. It is a capital light business.

The U.S. side of the business became weak last year. It is mostly equipment leasing as well vehicle financing. There is an ongoing strategic review. He considers it OK but there are better places to be in the finance sector.

It executes well, pays out most of its earnings and is still opening U.S. restaurants. It is not a growth stock - MTY Foods is better for this in the sector.

He likes the business and its dominant market position. He hasn't owned it because of its premium valuation. His favourite in the sector is TIF International (TFII-T), a trucking business which gives much higher returns and may be broken into two parts.

It missed a couple of quarters and has undergone a strategic review but has not been sold. It has stopped doing acquisitions and is focusing on operations. It has a new CFO who has a good reputation. It looks cheap, is executing, and is a potential takeover. He is looking at an $8 target.

It is under-followed since it hasn't raised money in over 20 years. It buys and manages small and mid-size apartment buildings in Western Canada. Its number of apartments has grown substantially and continues to grow. It has a record high number of units rented as well as record high rents. The CEO is excellent and owns half the business.

It was spun off from Constellation Software about a year ago. It is in the same business of Vertical Market Software but differs in that it focuses on media and telecommunications and does larger deals. It also specializes in corporate carve-outs, buying a division of a big company. Its pace of acquisitions is good and the CEO talks to the street more than CSU or TOI. We can expect returns similar to those of CSU

It is one of the largest providers of frack sand in Western Canada and the prices of the contracts have increased. Its priority is to pay down debt. There are lots of catalysts and at expected $4 per share earnings next year, it is still trading at a good valuation.

It is a specialty insurance company and the numbers have been good. He has a couple of others. in the sector.

If you're looking for a bank stock go with something bigger. If looking for more growth you should do better with some of the non-bank lenders, 

He likes and knows it really well. Management is doing an excellent job. It has doubled its profits every year for the last 3 years. It is hard to keep up this pace but it should be able to continue to have healthy growth and profits. Has a high ROC, good dividend, single digit multiples. Management and insiders own lots.