Peter Hodson

Yesterday was great. We've had some really big moves and are starting to see some M&A activity. Market confidence has to last for a period of time before people say it's time to buy the small companies. They will move and be volatile, but we've had 4 or 5 false starts to a small-cap rally in the last 3 years.

Any time inflation picks up, small caps get a hiccup because they're quite sensitive to rising rates. There's no one indicator that signals a small-cap rally. Things just slowly build until investors get more confident and willing to take more risk.

When people talk about risk in small caps, what they really mean is price volatility. But there are lots of small caps out there sitting on $100s of millions of dollars in cash, and their fundamental risk is not that big. But some of them are much less risky than a large cap sitting on $100s of billions of debt, which will get hit if interest rates go the wrong way.

In Canada, small-cap golds are up 60-70%. Just ridiculous in terms of how well they've done. Starting to see some industrials move. 

Starting to see small caps transition into big caps, and CLS is the best example of that. It went from a dopey little company 5 years ago to today's $30B market cap. ATZ is another example. That's what small-cap investors want to see. 

In general, people are still gravitating toward $2-3B companies rather than $500M companies.

In last quarterly report, company stated that small and medium companies weren't buying as much as expected. AI can do a lot of what it can. Customers now have "buy or build" options out there. Trades at 52x PE, with negative momentum. Tax-loss selling candidate.

Doesn't think it will get eaten, but a lot of software companies need to adapt. They can either make acquisitions to make themselves more competitive, or hire smart developers to create in-house AI solutions. There will be a lot of angst and a lot of investor uncertainty.

Some will suffer, but others will adapt and prosper.

Likes it a lot. Would suggest a longer hold than 2-3 years, as it's a relatively small company. Batteries, sonar, military. Products are robust and customers like them, but their small size was an impediment. Borrowed $100M to shore up balance sheet. Contract backlog is growing.

Market cap is now over $1B, which brings more investor interest.

Big hit on EchoStar, but it had nothing to do with MDA and everything to do with EchoStar changing its business. Reaction was far overdone.

Though these contracts don't come around every day, the capacity is there. Just a matter of time before that capacity gets filled up. Great job on all other contracts. Revenue visibility is quite intense from the big backlog.

Success attracts competition. Internal issues as well. Don't count it out yet, just a matter of getting back on track. And if it can, could do quite well. Customers still love them. 

Interesting at this valuation, but need 3-5 years. Accumulate slowly on weakness.

One issue is that every once in a while they take a fixed-price contract and lose $$ on it. A risk that keeps the valuation low. Sector should have some growth with planned infrastructure spending. Needs a bit more consistency in execution and meeting estimates.

It's just OK. He prefers the larger companies like WSP and STN in terms of safety, especially as we don't know which way the economy's going to go in the next couple of years. BDT is relatively small, so investors would be quick to sell if things get dicey.

Sector should have some growth with planned infrastructure spending. In the space, he prefers larger companies like this one in terms of safety, especially as we don't know which way the economy's going to go in the next couple of years. Large companies also have a global footprint, so US tariffs are not as much a concern.

Sector should have some growth with planned infrastructure spending. In the space, he prefers larger companies like this one in terms of safety, especially as we don't know which way the economy's going to go in the next couple of years. Large companies also have a global footprint, so US tariffs are not as much a concern.

Decent dividend. Valuation's pretty attractive. Likes that it's been around a long time and has seen multiple recessions. Cut dividend 20 years ago and never forgave themselves because of how the stock reacted. Doesn't take on a lot of material risk, just a refabricator and turns over inventory quickly. Steel prices may go up and down, but as long as they manage their inventory then they don't have a lot of capital at risk. 

Quiet, very well run company that falls under the radar. Economically sensitive, but cashflow and balance sheet are improving. Tariff uncertainty still a cloud. Build Canada program will help. Able to make acquisitions. Yield is over 4%.

Valuation, dividend, and balance sheet are OK. Too boring for him. If you're a small- to mid-cap dividend player, it's a pretty good and steady name. Less sensitive to the economy. Protected by sugar quotas, which look pretty secure right now (though you never know what the government will do). #2 player in the space, and hard to get into.

Don't expect miracles. Take your 5% dividend, get the dividend tax credit, be happy with that.

Tricky, because it used to be a $60 stock. Lots of missteps. Cancelled dividend for a while. Difficulty meeting expectations. Stock fell off a cliff. Looks much better now. Had a lot of debt, but has now improved balance sheet. Restarted dividend. Legacy sentiment is a stigma. 

(Note the short timeframe.)  Still relatively unknown. US business is growing, as the US sports business is absolutely booming. Still plenty of opportunity here.