Jordan Zinberg

Large caps are trading at a 2 turns premium to their normal historical multiples over the last 20 years, whereas small caps are 5 turns cheaper than their long term multiples. He uses P/E multiples so translated into numbers, 22X forward P/E is usual for small caps and they are at 17X now; large caps are usually at 20X P/E and they are now at 22. This is all based on U.S. data. Also small caps normally trade at a premium multiple to large caps. There are lots of great small cap companies in Canada and many investors are underweight in this type of company.
There were a lot of takeouts in small caps in September/October and there is more to come with the good valuations. A lot of deals can be done for cash and refinanced later if rates go lower. The IPO market is quiet right now but we could see more later

It did a transformational acquisition of a large U.S. player a year ago and this doubled the size of the business. Going forward there could be some one time costs. It is a fantastic business which is well run. It is not in a high growth area but will be a dominant player going forward.

The question was on whether he would use an ETF for small cap investing and would he go with one focusing on growth or on value. He would not use an ETF which he feels hold below average businesses in the small cap area. He looks for small caps with both growth and value and feels he can outperform by holding the individual stocks themselves. If you need to buy an ETF you could go with the Russell IWM.

This used to be called Patient Home Monitoring at one point. It is very cheap, has been performing and executing acquisitions pretty consistently. The CEO and management have done very well. The small cap health care sector is quiet but due to Quipt's good value it could be a takeover candidate.

It's gone through a couple of management team changes. There are better and more profitable places to be in technology.

It was a top pick in 2021 but has gone through a huge transition with a big acquisition. Has a new management team. With deterioration in financials it is not for growth or quality.

It has changed over the past few years. It is in the mid single digit ROE range and the dividend is gone. There are better specialty/leasing businesses to buy. Also TFI would be a better choice on the transportation side.

It did well during Covid but has fallen off and it will be difficult to get back to Covid volumes. Its results are bumpy and he wants more consistency.

In 2020/21 it was growing rapidly but has pulled back from its high of $12. There were some missteps and it missed a couple of quarters. However in the past 6 to 12 months it has started focusing on integrating the companies they bought and not buying new ones. It is also focusing on cost control and cross selling. It is doing the right things now but it will take some time to expand their margins.

Their architectural products come later in the building process. He sold last summer since it is tied to housing starts but is continuing to watch it. It has traditionally 15% growth in its business. Volumes and prices have come down after Covid but it is a well run company.

He got his double and is still looking for a triple. It is buying back debt. Not well known with an 80 million market cap. It continues to operate very well and is the largest frac service in Western Canada. With LNG coming on this year, it should help.

It has a yield of 5.9% which is safe. It is not growthy enough for him since he is looking for 20% growth per year. However it is a steady company with a decent chart

It is very ill-liquid so he hasn't bought it. However for a small retail investor it has great growth and good valuation along with a management team that has done well. Canadians have a wide array of larger cap financial stocks to choose from and tend to forget the small cap financials so it is good to find these specialty lenders. It is up 36% in a year.

It is the biggest position in his fund and his personal holdings. It is positioned extremely well along with a consistent ROE of over 20% over the past 10 years. It grows its earnings well and is the top performing financial stock in the past 10 years. It has met or exceeded its targets every time and is innovative with new markets and products. It could be introducing a credit card product this year. Its lending business is non-prime and it has 400 locations as well as a point-of-sale business.

It is in the telecom services business and has struggled for years. It is an unprofitable micro-cap stock with poor liquidity. There are lots of other opportunities.