Andrey Omelchak

He is bullish on cybersecurity since the whole sector will see a big pickup in demand. Developments in AI will result in problems as related to cybersecurity. Risk management should lead to a pullback in AI stocks. Although Crowdstrike has done a great job and has a great reputation, he has no strong opinion, He suggests owning a cybersecurity ETF.

He has followed it for many years. He feels it is right to focus on Canadian assets which give higher returns on invested capital. It is consolidating clinics across Canada. There is still more to do in divesting non-core operations in the US. It is too competitive in the US but in Canada it has a competitive advantage of understanding the market structure and how these clinics operate.

It is at a low point but the story hasn't fundamentally changed. They have a lot of excess capacity and a lot of leverage. The market is now more short term focused so there has been a big over-reaction to the downside. You should be well rewarded for your patience but it will take some time. The CEO has been purchasing shares.

This is an exception for him and the only investment he has in the sector. It is a crypto currency miner transitioning to energy and as such it has tremendous upside potential. Power is in huge demand and there is a general shortage. HIVE has several contracts with much more coming along with much more free cash flow. He feels it is not the leader and is somewhere in the middle of its transition

This a Canadian bank ETF along with Manulife, Great-West Life and Coastal Insurance. He is bullish on Canadian banks. They have been hitting all time highs and expanding multiples. As a group they have reported phenomenal results. Efficiency ratings have been very good and Return on Equity has expanded. Credit experiences have been good for Canadian banks.

He has met with management a number of times. They have benefited from the takeoff in defense spending. The Canadian government has so much money budgeted for defense and some of that money goes to Kraken Robotics because they are the only company in Canada that can do what they're doing. They claim to have a different technology but he is skeptical of that since other companies are trying to replicate it. Other countries could buy their technology but they will have to support their own domestic capability. He raised the question of sustainable margins.

It is potentially interesting but he prefers HIVE in the space and recommends moving some money from HUT to HIVE. Power generation is a sustainable business model. In general he is not a fan of bitcoin itself. He invests in real, productive companies with good cash flow and producing something useful to society. Payment for bitcoin is not great.

It is a solid company with a good dividend that is safe. He is excited about its prospects going forward. Big investments in Northern Canada and north of Canada will benefit NWC directly. Should see a pickup in its organic growth rate and margin expansion. It is a good stable small cap investment and may even see an increase in its dividend.

The question was on Canadian banks and which one would he favour. The banks reported phenomenal results with the Bank of Nova Scotia being the most impressive. National Bank and RBC have done a good job in the capital markets. Overall it is difficult to find a differentiation between the banks. Their capital ratio is still elevated which means they can deploy the excess. There are no issues of credit - the banks have been prudent in their lending operations. He is impressed with the Bank of Montreal which has been understated. Buy the banks as a group and trade as a group.

He liked the growing backlog in January at 40% per year and problems with fixed contracts coming off the books. They also indicated a clear path to expand their margins. Business has become better and happening faster with much more room for growth. He is bullish on the Build Canada theme and the urgency to get things done with the recent tariff troubles. Red tape is dropping.

The drop in the stock price is not warranted. The story has not changed and it has delivered good results. Book value has grown 20% year over year and bypassed $1 billion. It has an exceptional combined ratio for an insurance company - under 85%. It is getting cheaper in Book Value and the story is more exciting.. There is lots of excess capital to deploy. 

It produces lithium ion batteries and he still likes it. It is based in Mississauga and building a mega factory in Jamestown, USA, which is on schedule. A team in South Korea is getting the equipment ready. The potential is multiple fold and once the product is up and running there will be massive demand. It just signed a commercial agreement with Amazon which shows a major validation of their technology, as well as the uniqueness of what they're doing. Amazon can take all the capacity of Jamestown which will triple their revenue to begin with.

The question also asked about his advice of when to sell. There is risk management involved in the investing process and everyone has different philosophies around that. He has a list of securities which he knows really well. He gets interested when he has confidence in a company that trades at a big discount to its intrinsic value. As it increases towards its intrinsic value he trims its weight to add to or take other positions. Everything has a price. As for TFI International it has done very well and made some major inroads. It still generates high free cash flow and operations have done a great job. It is a solid hold going forward but would not be his biggest weighting.

He is very excited about this company and the acceleration of earnings growth going into the rest of this year and next year. It has done a great job on the originations front and the credit quality will keep improving. The big financial institutions are cutting back on lending activities and Propel can get better customers. It also makes money on its technical platform. It's moving in the right direction but still very cheap.