Comfort Systems USA (FIX)

Stock's run up because whoever wins the AI race, the chips need to be kept cool. The picks & shovels suppliers are the ones making the money.

They have plenty data centre exposure but has nearly doubled this year. Too far, too fast.

The "comfort" refers to that of massive server farms for data centres. Hammered last January when DeepSeek deep-sixed all the AI stuff. Largest holding in his US dividend advantage strategy.

Hold on to it, as a lot more $$ is being plowed into data centres. Other competitors may jump into the space, but this name is the leader. Lots of contracts with data centres.

It makes him incredibly nervous to hear that someone's bought a stock solely on the recommendation of someone on TV, especially him ;)  Things can change over 3, 6, or 12 months, and Brendan might have sold it. So caveat emptor.

Still owns and likes. Got hammered (technical investment term :) with news on DeepSeek. This made no sense. Most of the cooling that's being bought is to cool computers. He continues to invest in companies that make $$ regardless of who wins the AI race.

(Note the short timeframe.)  Lots of continued demand for HVAC due to higher electricity bills, global warming, and buildout of data centres. Growing profits in 35-50% range, so he'll still buy at these prices. But lots of volatility, so pay attention.

It makes AC products but it's all about data centres which will need more and more cooling systems. It is the picks and shovels that make the industry run. He also likes Carrier.

HVAC has been an excellent area to be in, partly due to buildout of data centres. A top name in the space. Improving ROC. Pretty reasonable value from the view of modified discounted cashflow. A bit higher on EV/EBITDA at 23x. He's bullish, very nice profile.

Having to cool data centres will be part of its business, and will see lots of growth. ROIC is 29%, and that's huge compared to competitors like HON. WACC is 12%. Dividend's grown roughly 40% over the past 10 years, and the return's been 35%. US homegrown, so no tariff concerns. Yield is 0.38%.

Small cap, extremely volatile, so start with a small 1/2 position. If he were an investor at home with $10k to invest, he'd put in $5k today. That gets the dividends coming in. See what happens with the growth and the economy. If stock falls but the metrics are good, that's the chance to buy the other half.

It makes AC units which are needed for AI systems. He still owns and feels there is still lots of room to run.

Will benefit particularly from the rise of data centres which need a lot of cooling. Happy this has done well.

Picks and shovels theme. Data centres, especially, will need more and more air conditioning.

Air conditioning products continue to rise in demand with data center (industrial applications) use rising. More A.I. computing will result in increased demand for cooling systems. 

Extremely boring. A/C, heating, ventilation, factory systems. Very good earnings, which should grow faster than the market thinks. Popped on earnings, but still room to run based on the reindustrialization of America. PE is 22x. Yield is 0.48%.