The Canadian Investor - 4 Industries AI Can’t Replace and Stocks on Our Radar

Episode Date: February 23, 2026

Simon and Dan take a break from the usual AI doom talk to focus on the other side of the trade: industries AI is unlikely to disrupt—and may actually strengthen. They discuss why parts of the “real economy” (natural resources, waste collection, skilled trades, and critical infrastructure work) have durable moats tied to physical assets, regulation, and human accountability. In Stocks on Our Radar, Dan revisits Shopify after a sharp drawdown and explains why AI could be a tailwind through payments and backend infrastructure, even if storefront tools get commoditized. Simon breaks down why he started a position in WSP Global, pointing to its backlog, acquisition strategy, and long runway from grid buildouts and electrification tied to AI-driven energy demand. Tickers discussed: SHOP, WSP.TO, ACM, PWR, BDGI.TO, ARE.TO Subscribe to our Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.  See omnystudio.com/listener for privacy information.

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there's going to be some great opportunities for investors this has to be one of the biggest quarters I've seen from this company in quite some time well Welcome to the Canadian investor podcast. I'm back with Dan Kent. We are back for our regular episode today. We have a fun one plan. We'll be starting off talking about AI, but taking a little bit of a different approach here because I feel like we've talked about it quite a bit. So we'll be talking about industries that AI is unlikely to disrupt. So it's been a lot of talk. We're guilty of that. Like a lot of other social media people to talk about some potential disruption from AI, including SaaS stocks. But we'll talk about actual industries or sectors that shouldn't get too disrupted. And then we have stocks on a radar presented by our great sponsor, EQ Bank. So we have a couple of companies. People probably have heard of these companies. So but those are two companies we have on radar.

So stay tuned until the end to hear that. So you want to get it kicked off with the sectors or industries that are unlikely to get disrupted by AI? Yeah. So obviously you had mentioned, like there's been so much talk. about, you know, stocks that are going to face disruption. Whereas if you look to the opposite end of the spectrum, there is some areas that I think, you know, probably won't be impacted at all. And what I mean, like, I guess it's not to say that they won't use AI, like all of these industries, I believe will use AI a lot. But what we mean by disruption is, you know, from a SaaS perspective, like,

you know, there's, there's potential material disruption in the actual revenue generation of the business. And yeah, like I believe that for SaaS some software businesses, like this is the start of their, a debt spiral for them. Some. I do believe there is some that will be completely disrupted by AI in the next five years. Like I think that's, I'd be surprised if that doesn't happen. Does it mean that all of them will? I don't think so. But again, I think some will for sure. Yes. I mean, some of those fries depending on, you know, pricing structure, a lot of that type of stuff. but the first industry I thought of was like bereavement services like funerals. Oh yeah.

Like I mean, I don't really know if there's like there's way too much of a human element here to ever be disrupted. I mean, and in addition to this like an AI agent will never be able to do what needs to be done in this industry or at least, you know, at some point even if some sort of robot is capable of doing it, people will not want. want it. Yeah. Do you want to talk to a robot when you just lost a loved one about making funeral arrangements? I'm going to say probably not. I mean, I think most people want when they're feeling, you know, a lot of grief. They want someone or someone not a thing that is compassionate, right? So, yeah. Yeah. And I think in this industry, like a lot of it is effort kind of equals value. So, I mean, in 20 years, could they, technologically,

have a robot that could handle, you know, greeting people at the door or doing anything like that. But like, will we? I'm guessing probably not. And I mean, there's there's kind of an element of regulation here. I mean, you're dealing with deceased humans. Industry is highly regulated, you know, health codes, land use, like legal liabilities, all that type of stuff. And I mean, again, if you're a family who just lost a loved one, I just think the last thing you're going to want to do is is hand it off to a funeral home that is doing any of the work. On the flip side, I could see these companies using AI to improve their internal systems, just like practically any company.

So scheduling, land management, bookings, et cetera, might become easier. But like, I think all this is going to do is allow these companies to be more efficient, increase margins. But on the actual delivery of the service that many of these companies provide, I just can't see it. I can't see any future where we're using AI to provide a service like this. And I think what is eventually going to happen here is the large publicly traded companies. And to an extent, maybe the larger private companies are going to end up using AI to improve margins and cut costs, which will drive out smaller players even further than it does. And this industry is very acquisition

heavy. So like all these larger players, all they do is end up scooping up like mom and pop, funeral homes, cemeteries, crematoriums, things like that. So I think the companies that have money to invest extensively into AI will widen the margin gap and will be able to acquire even more aggressively. In terms of companies, there's only around three or four publicly traded ones in the space, none anymore in Canada. There used to be one called Park Lawn Corporation. It's one I owned for a very long time, but it ended up getting bought up by a private equity

company. I don't know, that had to be a year and a half ago now when its price took a tumble because of rates, but the most popular one would probably be service corporation, ticker SEI, then they have carriage services, which is CSV, and then Matthews International. Matthews International is more along the lines of the supply side of things like caskets, embalming stuff, but still very relevant. Service Corporation has done a pretty impressive job of keeping pace with the SP 500 over the long term.

The last three years have been pretty, you know, kind of meh for it overall. I think the economy is bad enough that I think a lot of people are maybe deferring pre-need. Like they're kind of going on an as basis. Or maybe they're using the cheapest services that are lower margins, right? Yeah, exactly. Like crematoriums, things like that, cremation, exactly. But I think like pre-need also dips in bad economic times. Like these companies take a lot of money.

Like a prime example, my grandfather, he bought his funeral service like, 20 years prior to passing. It's crazy. I got, I got a respect. Yeah. The money you save is crazy. But that's a big element here. But yeah, I don't think, I don't think AI will touch this space.

I think it'll only improve this space. Yeah. I mean, I think I tend to agree. At the end of the day, there's going to be a need for this. We all have an expiration date. Sorry to break it for people. That thing they're going to live forever. But maybe who knows, maybe with AI will get to live longer.

but I feel like, yeah. Yeah, but I don't think we'll be immortal. But no, I think that's a good one. The first one on my list, that's the first one that came to mine, natural resources companies. So their value is definitely tied to real commodities for better or worse. Obviously, Brayden and I, especially when we started the podcast, we were more into really quality businesses. He wasn't a fan. I don't think he still is a fan of commodity businesses.

For me, I wasn't back then, but I've shifted my mindset a bit more just because these type of companies are really tied to stuff that can't be produced by AI. So oil, gas, copper, silver, potash, uranium, lumber, you name it. Obviously, I know, like lumber has been a tough industry, but these are real, like real world things that you just can't replicate with AI. But again, you have to live and die by the sort of the commodity, commodity prices. and supply is constrained by geology, permits, capital expenditures, and time. I mean, that's been one of my biggest bulk cases for owning some oil companies over the last

couple of years is at some point you're going to see that lack of investment by oil companies show up in the supply. There's just not going to be enough supply. It might take a few more years, but there has not been like enough investment. the last decade or so, and that's going to show up at some point. Their moat really revolves around reserve land positions, processing facilities, pipeline, rail, logistics, and regulatory approvals. AI definitely could be a benefit for them.

AI could help with a bunch of different things, including exploration, improved target generation, analyze geological data faster, raise a essentially have a higher hit rate on your, your projects as well and the ones that you're actually examining. Operations, obviously, predictive maintenance, the more you have runtime and the less it costs you in terms of maintenance, definitely the more output you're going to have, optimizing for throughput recovery, better scheduling, better fuel efficiency. These are all things that AI can help with. And obviously on the safety side, automation, robotics, remote operations would be a good thing. Actually, it would be even on the side of the most dangerous jobs, having potentially humanoids do those over humans. So you reduce the number

of injuries, which of course, aside from the human cause, there's also a cost for the businesses. There's more downtime when this stuff happens. So definitely I think it could be really good way for these type of businesses to improve their efficiencies. I'm not going to go through the names because in Canada, I think a lot of people are familiar with the names, but obviously think about your favorite precious metal company, whether it's even, I guess, a bit less so a streamer, but a Nico Eagle would be one that comes to mine. Nutrient, if you're thinking of potash and fertilizer, would be another company that comes to mind. You name it, we have a full slate of them in Canada, Canadian Natural Resources, would be another one on the oil side, Termaline. All these companies

would be some companies I think will be very resistant. If anything, they might also, especially on the energy side, get some big tailwind from AI because of the energy demand that will result from that. Yeah. And I think, like having worked in the space, the amount of money that is spent, because I worked on the shutdown side of things as well, the amount of money that is spent maintaining those plants is absurd. Like the manpower you need and stuff like that.

So if you can even mitigate that slightly, I mean, your cost per barrel probably would drop substantially. And yeah, I mean, there's just no real way to get it. Like, AI is not getting it out of the ground. It's probably helping the companies become more efficient at getting it out of the ground. Yeah, exactly. But even if you found a way for AI to get it out of the ground somehow, theoretically, I mean, most all these companies own the land. They own the reserves. Like, they're going to be the ones developing the systems to get it out.

anyway. So yeah, I think a lot of those companies will remain untouched. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too, until we switched to the new EQ Bank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free every day. transactions like EFTs, bill payments, mobile check deposits, and 50 outgoing and 100 incoming free interackey transfers. And to sign up, quick and fully online, no branch visits because,

let's be honest, no business owner has time for that. We use it for our own business and it's the first account that actually helps our money work harder while keeping operations simple. Check it out today at eqbank.ca slash business. My wife and I are currently planning a big summer trip to the Maritimes, and our daughter will be visiting Halifax for the very first time. We're looking for a place on Airbnb right near the water so she can wake up and see the ocean every morning. We can already picture ourselves exploring the waterfront and coming back to a cozy house to cook a family dinner or for a quick change of clothes and head to a local family-friendly seafood restaurant. Finding the perfect home base is making the whole trip feel real. It also got us thinking about our own place while we're away.

If another family's home can be the backdrop for our first maritime adventure, maybe ours could be that for someone else. Hosting our home on Airbnb would let travelers make their own memories in our beautiful neighborhood, while giving us extra money to put towards all those lobster rolls in Alifax. And the nice thing is the flexibility. We can decide to host our home only when it works for our schedule. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. Calling all DIY, do-it-yourself investors, Blossom is an essential app for you.

It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends.

And there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up. Some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. Okay. So I'll let you go to your second one here. I thought about this one, but I'm like, Dan, we'll want to pick it. So I left it for you. I knew you were going to pick it here. This one, I think this is an area I don't think AI will, it will touch. But again, as I had mentioned with the, with the energy companies, I think it's going to be the companies that are currently in the space. But I'll get to that in a bit. But it's the waste collections, you know, industry, whether it be like regular garbage disposal, whether it be like hazardous waste, you know, commodity type recycling.

I think it's, you know, AI is not going to take any market share away from the current waste. collection companies, I think what it's going to do is optimize them and make them more profitable. And yes, another company could realistically come in with a piece of technology that makes collecting the trash easier. Maybe it's a drone. Maybe it's a robot. Maybe it's an autonomous truck. However, they'll just, like, if this was a separate company, I think all that would end up

happening is they would just get squeezed out by these major trash companies. And the main reason is, just like the energy company. own the reserves, they own the land. Like these trash companies own the landfills. Every piece of trash needs to go to a landfill, landfills that are owned by the major waste companies, or at least they're owned by a smaller hauler and will inevitably be owned by the major waste companies,

because that's just kind of what waste connections and waste management do. They buy all these companies up. And I mean, these companies set the price to dump in the landfill. So it would be pretty easy to squeeze out any sort of threat. And like the more likely situation, situation, they're just, they're more likely to be at the forefront of the tech. They'll be the ones developing the vehicles, the robots, whatever it may be, because they have the cash flows to do so

at scale. I mean, they're, I think if you look at it from industries that will be disrupted by AI or potentially be disrupted by AI, like if we think of something like the legal industry, there's a lot of documents sifting, analyzing, collecting that leads to billable hours that ultimately leads to, you know, money being made in the space. I mean, the output of the trash industry is, is literally your trash is no longer on your driveway or that hazardous waste is no longer at a job site, whatever it may be. Like, improvements can be made, but I just don't see any level of disruption. And I mean, we're already seeing companies like waste connections and waste management

running pilots for material recovery facilities, pretty much sorting facilities. So prior to this, like, it used to be humans, sorting. pieces of recycling, pieces of trash, all that type of stuff, and they could go around 30, 40 pieces of minute. And apparently the robots they have at these facilities now, we're doing like 80 plus. So you're talking about like double the efficiency with pretty much no manpower. They also have sensors in the bins now. So like AI sensors that, you know, instead of the trucks doing regular interval pickups to bins that might be quarter empty, half empty, the sensors just kind of tell them when it's full and they go pick it up.

And they've installed AI into some of their trucks as a pilot. And early reports are saying it can detect engine failures, hydraulic failures, like 48 hours in advance. So they can fix them before they have a dead truck on the road. Like I think AI, the only thing it will do to this space is improve it. And we're kind of starting to see it already. I mean, it's bad for labor. I guess you could say like in terms of human employees. It's probably bad because I do think a lot of the people in this space will be replaced eventually.

But, I mean, it's definitely not a bad thing for the company. No, exactly. No, I think that was a really good explanation. You definitely know those companies better than I do. And the next one on my list, it's kind of in that same kind of general idea. I couldn't find a good term for it. I did use AI to get me the title for this section. It may make sense.

I thought it was pretty good. unstructured environment industries may not make sense right now, but as I elaborate, it'll make more sense to people. So think of these companies that are involved in trades and maintenance. And I think people may have been hearing a whole lot that university degrees, at least some of them may not be useful going into the future because of things like AI and because a lot of entry-level jobs just will replace, be replaced by AI that would come from those university degrees, I'm not saying that they're all not useful, but I think some of them will become much less

useful or maybe even obsolete. Again, it's not an all or nothing. I think a lot of people get just too caught up in a kind of debate of all or nothing here. Another way to put it would be physical world operators. Think of companies that install and maintain things like HVag, elevators, electrical components, plumbing, all these things. I don't think they're going they're going to be replaced or majorly disrupted by AI. I think these are all things that will be very difficult to do by AI, at least in the medium, short to medium term. You still need people to install, repair, inspect real equipment in real place.

And I think that's the biggest advantage they have because real world can be really messy for AI. Think retrofits, old building, tight access, surprises behind walls. It becomes hard to automate. If you don't have a pre-established kind of pattern, that's why you see a lot of AI and you hear stories in China where humanoid or robots are able to replicate this or you see videos of AI like doing dances and stuff. That's because they have something that's pre-program in a set environment. When you start getting curveballs, you need the AI to actually be able to assess that

information that it's probably never dealt with and then get the proper, do the proper action. Yeah, I mean, yeah, there's a lot of unknown things when it comes to construction. And yeah, as you had mentioned, they're like, obviously all these LLMs are trained on publicly available data, you know what I mean? So as soon as it has to start interpreting things on its own and coming to the best, you know, conclusion, I think it would struggle. I think a lot of construction companies would fall under this as well. Like, I mean, one I can think of in Canada, it just off the top of my head would be like an ACON. like a road construction infrastructure type company. Stuff like that, I think, you know, AI will help, but not necessarily disrupt.

Yeah, exactly. And it's we're governed by safety standards, permit, inspection, warranties. Think of the building code, for example, license, and accountability is really important. So when something fails, there's some real consequences. And will companies and people who hire these companies, will they want to actually take the gamble that AI could fail? Like, not saying that humans don't fail. Clearly, they fell as well.

But humans will be able to make a better assessment and actually make sure that the things is properly done. So even if AI can help, it would likely be more like as an assistance or like a tool to assist here. And work would still need to be completed and verified by humans. Again, I'm not an expert of understanding the work that's done by role. robots, but to my knowledge, it's mostly works best in controlled settings. And job sites are just simply unstructured and constantly changing. I think that's just the reality. So AI could be a

tailwind here because it could help, again, not disrupt, but it could help with better diagnostic, predictive maintenance. So we've talked about that kind of stuff. You did mention it with waste solution or waste management, which can lead to fewer emergencies, higher up time. They could do for elevator repairs, for example, maybe they have limited capacity to do these elevator repairs, but with AI, they're able to actually go in service

the ones that actually require service on a priority basis. So they can better plan that way instead of just going every three years, maybe AI can prevent them from going that regular kind of time frame because it tells them whether the maintenance is going to be required sooner or later. again smarter scheduling dispatching parts planning safety improvements with better monitoring and target

automation and the mode is really around the scarce skilled labor local responsiveness reputations and compliance driven work i think that's really important you want the elevator to not drop when you're on you're in it you know that's that's kind of i like to take elevators that don't stop randomly so that's i don't know about you that but that's kind of that's kind of my agree i agree yeah you agree So some companies, you did mention ACON, that's a good one. Otis Worldwide is a big one which install services, elevators, and escalators. Limbock holding and Otis is the ticker OTIS. Limbock Holdings, ticker LMB.

They design, manufacturer, install, and maintain things like HVAC, plumbing, electrical for building. Quanta services, take care of PWR, one that I've talked about before. I should have bought it when I talked about it too. Oh my God, this company is like two and a half, like, more than double. Like I talked about it around Liberation Day. Yeah. It's gone up a bit. Yeah, a little bit since. I think it's more than a double since. But they design, build, repair, and maintain power transmission and distribution infrastructure. So really also big tailwinds for them from AI and unlikely to get disruptive. If anything, they're on the opposite end of the spectrum.

Like big tailwinds just because of the energy demand. And then the last one here, Badger Infrastructure Solution, ticker BDGI on the TSX. It is a specialized non-disrupted excavation company, so it digs precise holes and perform tasks like potholing, utility locating sewer services, debris removal, emergency response without damaging buried infrastructure. So this is the kind of stuff that if you think about it how like I've seen them a lot like with like sewers and catch basin and stuff, like that stuff does not seem like it would be easy for AI to do. Like that stuff seems like it requires it human because it's probably,

especially when you're dealing with older infrastructure that could be rusted, like all that kind of stuff. Really interesting play here. Canadian name is while I wanted to make sure there was a couple in there. Yeah, I think, I mean, after all this is said and done, I think like if you, if you sum it up, like I think data and coding is the main disruptive element. Like if you deal, like I think if you're dealing with any amount of data or, you know, you're required, a lot of your hours or profits are made from sifting through data or like analyzing data. I think that's kind of where the potential disruption comes in. Whereas, you know, like all the companies we talked about today or I don't even know what name. I guess you could say real world, real world economy where, you know, they can't really

be easily disrupted because they're not, you know, first off, going through data or digital based, coding based. So probably could have gone through a bit more industries as well, a lot more real economy industry, like say railways, for example. Yeah, I mean, no, that's true. I thought about a bunch of them and maybe just to wrap this up here. Just thinking about the bereavement industry, if you think about it, a good example to see how people will still want human touch. And I'm not just talking about that, but industries that have like a personal service, think about what was it like 10, 15 years ago, there seemed to be a push from grocers to like do that self-checkout. I don't know if people have noticed, but they've scaled that back a whole lot over the last like

five years or so. They're still there, but it was supposed to be the death of cashiers and stuff like that. And I think there's just some people that like that human interaction. I think there's also the fact that I feel like the cashier is faster than I am. If there's not a huge line, if not, I might go to the self-checkout, but that is an example, I think, where there's still going to be a whole lot of people that want that human service. Yep, I think so, and I don't think it's going away anytime soon. No, that's good. Having cash on hand is essential for any business.

Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience, too. until we switch to the new EQ bank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments, mobile check deposits, and 50 outgoing and 100 incoming free interackey transfers. And to sign up quick and fully online, no branch visits because, let's be honest,

no business owner has time for that. We use it for our own business and it's the first account that actually helps our money work harder while keeping operations simple. Check it out today at EQBank.ca slash business. My wife and I are currently planning a big summer trip to the Maritimes and our daughter will be visiting Halifax for the very first time. We're looking for a place on Airbnb right near the water so she can wake up and see the ocean every morning. We can already picture ourselves exploring the waterfront and coming back to a cozy house to cook a family dinner or for a quick change of clothes and head to a local family-friendly seafood restaurant. Finding the perfect home base is making the whole trip feel real. It also got us thinking about our own place while we're away.

If another family's home can be the backdrop for our first maritime adventure, maybe ours could be that for someone else. hosting our home on Airbnb would let travelers make their own memories in our beautiful neighborhood while giving us extra money to put towards all those lobster rolls in Alifax. And the nice thing is the flexibility. We can decide to host our home only when it works for our schedule. Your home might be worth more than you think. Find out how much at Airbnb.ca. Calling all DIY, do-it-yourself investors,

Awesome is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked.

And then once you link your brokerage account, you can get in-depth portfolio insights. track your dividends, and there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up, some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store, and I'll see you there. So let's move here.

Stocks on a radar so we don't go too long. Yeah. I'll let you get started. It's a small Canadian company that often battles with Royal Bank to be the largest company in Canada. Yeah, it's, well, definitely the curse is still alive because it's, I think it's going through a 35 to 40% drawdown over the last while. That's Shopify. So, I mean, they're a $200 billion company. They're growing at a 30% clip.

operating margins are around 17%, but the thing is they're continuing to expand. I mean, the company has just moved into kind of that profitability stage a few years ago after, I don't want to say eight years of cash burn. Like this company never really went through a substantial cash burn stage, but it was unprofitable, managed quite well, so they came out of it all right. But you're definitely starting to see profitability rise. Free cash flow margins are double digits for two and a half year straight, so that'd be 10 straight quarters. And the one thing is the company is expensive. Like you're going to see huge drawdowns in this company's share price,

especially under any sort of potential, I guess you could say disruption or slowing growth moving forward. Like they're trading at 72x EV EBTA and around 12x EV sales. So this would be their enterprise value to their revenue. And I would kind of consider this in most cases, nosebleed level valuations, but I do think it's Shopify's case. I mean, considering the growth and considering the potential future growth in regards to AI, I do think it's expensive,

but I think it's somewhat justified. And I think a lot of people look to the 20, but even if you compare it to a name that people might think is crazy overvalued, like, Nvidia looks like a value stock compared to Shopify. Yes. you just look at the traditional metrics, trading at a P, trailing 12 months of 45. If you look at the 412 months around 24 pegs,

so the price to earnings growth is like below one for NVIDIA. And that would have been a 4 plus for Shopify. So just to give some context here, just because I think a lot of people associate NVIDIA with just speculation and being overvalued. When you're looking at these kind of metrics actually paints a different picture, with Shopify that, you know, there might be good reasons for for it to be highly valued like that, but I just wanted to show the reasoning behind it.

What, I think a lot of people look at a stock chart and see the stock price goes up and automatically associates that with being overvalued. And one of the main things you'll see, if you look at a chart of Shopify back in 2021 to like probably its peak price, which would have been like, I don't know, probably before this drawdown, like three, four months ago, they were almost the exact same price, but it's very important to distinguish that they were not trading at the same valuation. So like Shopify back then was 427X EV EBDA and 37X EVV sales.

So because the company generates so much more revenue, so much more profits, the valuations are not even close to 2021 levels, but they are expensive. 2021 was craziness. But I haven't bought Shopify yet. I own Shopify from, I think it was probably 2017 till like 2021. I ended up selling it.

But I have been looking at it now that it's down, you know, 35, 40%. And I think AI fears are starting to hit Shopify as well because I mean, on the surface, it's pretty easy to see how this company could be disrupted by AI, like storefronts and storefront tools, which has kind of been their bread and butter for a while, they would be very easy to create via AI. Like the element of Shopify's, you know, kind of moat being that plug-in-play storefront store, I guess, for small merchants. I think that's kind of dead.

I just think it's, it would be relatively easy to replicate. It's more so the payment network and kind of the infrastructure behind the scenes. That is what is powerful about Shopify. And I think, like, you can think of it here. If you think of, you know, the reality here is AI can paint the high. house, but it can't really install the plumbing. Yeah. I guess we talked about that in the last segment.

And I think, you know, I think the future of online shopping is AI agents. And Shopify is not what these agents will replace. It will be what they use. So I don't really think they need to fight AI all that much. It's, you know, right now, LLMs and AI agents can't really surf websites like humans. So when you go to chat, GBT and tell it to buy you, you know, the best sneaker. for under $200 and you know, find any coupons that could get it for cheaper.

It can't really do it. And Shopify has partnered with companies like Alphabet to kind of integrate this into their LLMs. I can't remember what it. It's universal commerce protocol or something like that. So you're going to be able to go into a platform like Gemini. You're going to say, research these sneakers. I got a budget.

Here it is. Buy it for me. And you won't see Shopify, but it's effectively the backbone of what running that system, the payment processor that's running that system, things like that. So when you think about the friction this removes from the whole shopping experience, it gets a bit crazy to think how much more volume could be pushed through Shopify's channels. And that's kind of what I'm looking at right now.

I haven't dove into them too deep, but you know, you're always going to be interested in a company like Shopify when it's like 40% plus off highs. Definitely, you know, warrants an extra look. I'm definitely continuing to dig into it. No, I think that's a good pick, obviously, a company that most people are familiar with. So one, I think, I guess we'll see whether you had a position back in. So I will get to mine here. I'm just pulling a few charts up.

There you go. So when we're going over that. So for me, it's a company that I actually own. So I bought yesterday. We're recording this on February 18th. So I bought it yesterday because it has a company. a big drawdown. So I know there's a lot of people that already own WSP Global. That's a company that I own it as well that have. I have on my radar. I still have it because it's about a 1%

position. So I wouldn't be against adding another 1% so make it a 2% position for my portfolio. The main reason is they will be reporting earnings pretty soon. So I'm using the Dan's strategy to buy a little bit pre-earnings and a bit after. assuming it goes in the direction that I want to or it stays around the same, we'll have to see. But for those not familiar, WSP Global is a global design engineering firm. They're one of the world's leading firms in the space. They benefit from massive secular tailwinds. I like the global energy transition, public infrastructure, and grid buildout or electrification.

With the recent announcement of acquiring TRC, WSP is extremely well positioned. to benefit from power grid expansion and upgrades that will be neat in the coming decades, especially when we're thinking about AI that we just talked about in terms of industries that are less not as likely to get disrupted. The TRC acquisition isn't completed yet, but follows the acquisition they made of power engineers. I think it closed in late 2024 if memory serves me well. It's been a bit more than a year.

It's a company that grows through combination of acquisition and organically. So they have revenue of around 18 billion and a massive backlog of 16.5 billion. And that's important because I wanted to mention both. The reason why this is important is it gives them a bit of an overview on basically future revenue. That backlog will translate into future revenue. So you can almost think decays that that 16.5 is almost like gives you foresight into about a year worth of revenue for W. SP. And like I said, I don't think that's going away anytime soon. It is trading at pretty attractive valuation. So I have here, you can see it's a trailing 12 months, but I think for the,

I know some people argue whether trailing or forward is the best. I don't think it really matters as long as you're consistent with what you're using. You know, don't compare trailing with Ford. Like that's the kind of thing. It'll still give you a good idea. The advantage is trailing, you know at least what happened. You're not looking in the future. The problem with looking in the future is these are mostly assumptions. So it's kind of hard to be as precise for some companies, including WSP, might make a bit more sense because of that backlog that they have.

But for the most part, it's been trading at around some of the cheapest valuation it has in about five years. So definitely on evaluation basis, it's definitely interesting there. some people, I had someone reach out on joint TCI and they were wondering exactly what happened. It seems like it's just a market being a bit bearish on engineering firm. It sounds like I was digging a little bit into this. And the recent earnings from ACM, ticker ACM in the U.S., which is a large U.S. engineering firm, they essentially, they're guided for record backlog, but their earnings came a bit softer.

than expected. So I think that was one of the big reasons why the whole sector, you can look at pretty much all the engineering firms and they've taken a bit of a hit over the last month or so, especially over the last couple of weeks. So I think that's in big part. And the stock is down 18% over the last month. So it is, I think, provides a pretty good opportunity here to, to start a position. That's what I did. Yeah, I think another, like I think the news, because WSP felt like 10% in a day. And I know they do like a lot of environmental kind of like climate change type project spending like big government spending. And I know Trump kind of it was like the EPA like the environmental protection agency like something happened there where effectively like he doesn't

believe that they should be fighting climate change. I mean it's been pretty well known that he believes it's a hoax. And I mean, WSP has a lot of government based revenue. They, you know, they make a lot of money off public infrastructure spending and a lot of it on environmental type spending. So that could have caused a bit of it too, but it was a weird drop. And that's kind of what I thought, like it had to be earnings based off somebody. And ACOM kind of makes sense. I think ACCOM is more like Atkins Realist, though, and the fact that they do the actual

construction and stuff, whereas WSP is more so just the engineering. But yeah, I mean, it's been crazy over the last while of this company. I've owned it for a few years now. it goes, you know, it went for 220 to 280, back to 220 to 280 and now we're back to 220 level again. But it's hard, it's hard to not be bullish. Yeah, the Trump administration, I'm actually not very concerned about that because if you listen what they have to say in terms of energy, they essentially say like, like, I'm simplifying it, but they're just not, like, they want abundant in energy, but they don't care where it comes from. That's essentially

their stance on it. I know he's been like out there. saying stuff about like wind turbines and stuff like that. But at the end of the day, when you start really listening to some of these people in this administration, they just want the cheapest energy and they don't really care whether it's fossil fuels, green or whatever, nuclear as long. That's their main energy policy. So that's kind of where it comes from. So I'm not as concerned, but I also like the fact that they're kind of buying into the engineering, electrification, and all of that. So I think that's really encouraging. So for the most part, I mean, revenues have grown at a clip of 15% annually over the last five years just to wrap this up.

Free cash flow per share has grown at a pace of 10% over the last five years. So definitely these acquisition has been accretive to shareholders too. So I started a position and depending on what happens with the earnings, I will likely look at adding a bit more. But it felt like a good opportunity to do so here. Yeah. It's good points. I like the company I've owned it for for a while now. so bullish for the future of engineering.

No, exactly. So I think that's a good point to wrap it up. Hopefully, you enjoyed this episode. It was a little bit of AI, and it's hard not to talk about AI with everything that's going on. It's clearly changing our world. We'll just have to see how exactly it changes it, but it doesn't mean that you can't, you know,

make money and invest and make some good investment despite of AI, or sometimes AI can just be a good tailwind. So hopefully you enjoy this episode. If you want more content from us, you can go to join tcii.com. You can get our podcast ad free. We also post all the full videos in advance as well as of the episode coming out. If you just want to listen to us here, that's completely fine. We appreciate the support.

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