Hammond Power Solutions Inc. (HPS.A-T)

It manufactures dry transformers to provide power. They have a strong backlog and demand. The weakness in the stock reflects the cost over-runs on the new facility in Mexico which has been a drag on earnings. Tends to have choppy quarters.

Sells for 10x PE, whereas all the big European and US electrical companies sell at 30x. Leading market player in dry transformers. Business will boom with AI. Yield is 0.86%.

The results were a bit weak on the growth margin side and the backlog decreased a bit. There is huge demand for new data centres and this is good for Hammond Power. He started accumulating it this year. There is a new plant opening up which will be very efficient for electrification demands.

Double-top on the chart was a warning sign. Trendline broke pretty dramatically ~$120. We're now just above some longer-term support, around $60. After a selloff, investors tend to step into the bigger names first, so a smaller name like this can languish a bit. 

Stock may have overshot last few years. Pullback is an opportunity to accumulate. Really needed if you believe in the electrification trend. Not as exposed to tariffs as other companies, as they have pricing power.

Still owned by founder, second generation. Has done the same thing for a long time; what changed is number of places they could sell to. Good business, but not a great price right now. 

DeepSeek was like a "man overboard" moment for a stock like this, as many own it simply as a beneficiary of data centre buildout. This sentiment makes it harder for the long-term investor.

He sold it after rising 300% for him. Problem now are their capacity constraints. They're growing capacity in Guelph and New Mexico, but you're overpaying on limited growth. He doesn't see the growth, considering their PE.