The Canadian Investor - 4 Stocks on Our Radar - Finding Value Outside the AI Hype

Episode Date: August 3, 2026

In this episode of The Canadian Investor Podcast, we look at four stocks that are on our radar right now, including a mix of well-known names and smaller Canadian companies that may be overlooked by investors. We start with Netflix, which has fallen sharply from its highs and now looks much more reasonably valued than it did during the peak of its run. We discuss the company’s ad-tier opportunity, pricing power, content spending, and how AI could potentially lower production costs over time. We then look at 5N Plus, a Canadian small-cap involved in specialty semiconductors and performance materials used in solar power, medical imaging, defense, advanced electronics and space applications. We also discuss Jamieson Wellness, its international growth opportunity, and the potential takeover interest in the company. Finally, we break down Agnico Eagle, why it stands out among major gold miners, its low all-in sustaining costs, strong balance sheet, free cash flow generation, and why gold miners may be worth another look after their recent pullback. Tickers discussed: NFLX, VNP.TO, JWEL.TO, AEM.TO, FNV.TO, NEM, K.TO, ABX.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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biggest quarters I've seen from this company in quite some time well Welcome to the Canadian investor podcast. I'm Simone Berengay and I'm back with Dan Kent. We have a fun episode today. We'll go over two stocks that we have each on our radar right now. Some companies that you might be more familiar with and some that you might not have heard of. At least one of mine is a company that I had heard of a little bit but never really took the time to look into it. And some really interesting and compelling plays right now and just showing that you can find value in the markets outside of,

some of the high profile names that were seeing, some of the semiconductor names that are trading at sky high multiple. And I think it'll be a fun episode just to show that you can actually find value in these elevated markets. And it doesn't mean that you might think a bubble is happening in some corners of the market.

Doesn't mean that the overall market is in a bubble. I think we'll be showing that today and some really compelling plays here. Yeah, I think I've started talking about the one I'm going to go over quite a bit. I've covered it for a few years. My number one kind of reply to talking about it is a lot of people didn't even know it was publicly traded.

So I would imagine that's probably going to be the instance here. There's a couple interesting options, but yeah, two of them pretty well known and two of them, I mean, I mislabeled the one you're going to talk about severely before we recorded. So, yeah, let's get ready to. I thought you can't eat in stock. So that's not good, that's not good. I'll say what I thought it was when we start the segment and I was very wrong. But yeah, you want to get into the first one?

Yeah, let's get started. And this is presented by our great sponsor, EQ Bank. So stock on a radar is presented by EQ Bank. And let's get started. I'll let you start with the first name. Then we'll go back and forth. And these are going to be probably 10, 15 minutes each. So make sure you stay tuned till the end because there might be some names you're really interested in here.

Yeah. So the first one is a pretty well-known name. It's down a bunch of highs, and that is Netflix. It is a company that I've watched for quite a while, but I always thought it was just a bit too expensive. And the one thing I will say about Netflix, when I got to those highs, what were we at? We were at, I think, around 150 bucks a share. And now we're down to 72, maybe 145 a share. I think it's pretty close to 50% off highs.

But what do we get? We only got to 130, 130-ish share. But I think it was a bit too expensive. I could never really understand how a company growing, at the pace that it was was trading at such a huge valuation, especially considering the competition surrounding it. And when I say competition, I don't really mean that,

you know, there's a lot of companies out there looking to disrupt Netflix, but there's a lot of alternatives. You could argue Netflix is definitely the king of streaming. It's done very well. I took the alternate route, what would have that been in probably 2021, 2020,

2020, and went Disney because I thought Disney Plus. was going to be well, was going to be good. And I got burnt on that one hard. I kind of thought they would take over a bit of market share. But there is competition in the space, no doubt, which requires a lot of spending on content to kind of keep up that mode, maintain that. And it was trading at, I think at some points, it was trading at 40, 45x earnings and free cash.

Yeah, well, I'm just showing here the, because this will be available on YouTube. So the full episode will be available there. So I'm just sharing the forward price or earnings ratio. And you're not wrong here. So it was at some point, if we go back all the way to 2017, when they just started having some earnings, it was above $100. But even recently, if you're looking, yeah, like 2025, it was training around 50 times earnings.

And now it's come down to around 21 times forward earnings. Yeah. So I couldn't really wrap my head around the fact, even if you don't, if you look before that 50. it got up to how this company was growing at like Netflix is growing 13 14% top line. I couldn't really understand why it was trading at 40x expected earnings. But now that we get back down to 20, it's certainly, it's looking a lot more attractive at this point.

So the company kind of adopted a new way to make money over the years, and that is its ad business, which it allows you to subscribe for cheaper, but you have to watch ads. And this business is effectively doubling in size. We tried to find like a segment for it on fiscal, but they must not divide it out. They must not segment it out yet. Or at least not to data platforms. So it's pretty much doubling in size every year.

I believe they expected to double this year again. But it's got a pretty long way to go before it touches like the main non-advertisement subscription tier. So I'd say the one thing that does help Netflix is scale. So it spends more on content every year, more than pretty much any other competitors. So you get a bit of a flywheel there. You get more subscribers equals more revenue, which equals more money you can put into content, which ultimately equals more subscribers.

But the Netflix flywheel is not as, I guess you could say, as easy of a flywheel as Costco, for example. Because Costco, all they got to do is bring the product in volume. They get cheaper prices, which allows. them to sell it for cheaper, which brings in more, you know, memberships. Whereas Netflix, the flywheel is kind of a bit easier to break because if it creates content that is not good, it will kind of break the whole thing. So it's got to keep up on that pace, which is one of the main issues in this space is spending.

I'll get over in a bit how AI is kind of reducing that a bit. But the other element, kind of bullish element here for Netflix, at least by their internal usage metrics is it is kind of the cheapest subscription around. So the cost to a consumer per hour of streaming is much lower than competitors. So what this can allow them to do and what they've done in the past is pretty aggressively raised prices. So if I'm on Amazon Prime for, and I'm just kind of making up prices to make it easier here, but if I'm on Prime for 10 hours a month at $10 a month and I'm on Netflix for 20 hours at the same price, when Netflix raises its prices, instinctively, I'm still going to prefer Netflix because I spend way more time on the platform.

There is a fine line there, but I still do think they have a runway to raise prices. I mean, even if they raise my, if I was to keep one streaming service, I will say it would probably be this, maybe crave to a degree just because of the HBO element there. But I mean, even that's kind of, we just subscribe when, well, for now, House of the Dragon was on and then once that's done, we'll probably unsubscribe. whereas Netflix, I don't know, it just seems so sticky for me. I can't imagine ever canceling it. And with the ad side of the business being 5% of revenue and growing at a pretty fast clip,

this one kind of intrigues me because primarily the company has said that they're not necessarily doing a good job at ad delivery. They don't say they're bad, but they mention that there's kind of much more room for improvement. So if they can find out a way to build out better tech and also sell more ad inventory, you could definitely see this scale to double digit percentages of total revenue pretty quickly. And the other bullish element, as I mentioned, is AI. I think a lot of people think it's somewhat bearish because content will get cheaper. But I think like you need good content. There is a lot of bad content out there.

And in order to justify this, it needs to be good. For Netflix, they're spending a ton on content. And if they can create that content for cheaper, the difference pretty much flows directly to the bottom line. and they've mentioned they're utilizing AI, and I think last quarter they said like 300 plus pieces of content. However, they're also mentioned that they're not going to be dumping those saving. They're not going to be giving that back to shareholders or retaining it or anything. They're going to be dumping it all into new content and not boosting margins, as I said.

So trying to widen the moat. And there's lots of things to like here, but I do want, in my opinion at least, I don't really think Netflix is cheap or anything, which kind of seems crazy to say, because it's been cut in half, but I think this is just kind of a situation. It's cheaper. Yeah,

like there's a lot of people talking about how cheap they are. I think, like, in my personal opinion, I could be very wrong. I've been wrong in the past, but I just think it's kind of gotten down to somewhat of a fair value, maybe slightly attractive value.

It's just kind of slowing down. It's only growing at a 13, 14% pace on a top line basis. And again, as I had mentioned, back at its peak, I thought 40x, forward earnings was was a bit too expensive. And I do realize the company owns a ton of

solid P like intellectual property that can kind of boost these prices. But you can also find companies growing at a 14% pace for for sub 20x earnings pretty easily. The next company I talk about later in the episode will be one of those. But I think there's a pretty realistic path for Netflix to compound at a double digit rate from here on out. And I think you're finally getting a decent price for it. The ad business has enormous potential, much higher margin and if they can kind of perfect it as much as they can it could make up a decent chunk of earnings over the next while but for me it just went from outrageous to kind of fair in my opinion yeah i don't know if we'll ever get to 40x expected earnings again but yeah it seems like a good

opportunity right now i mean if you're looking for a blue chip streamer this would be this would be the one yeah i guess the only risk i see major risk for netflix is you're looking at the the pricing here of the subscriptions. And one thing that just stands out, if you're, you're looking to save costs and say you have the, so they have standard with ads for $8 a month,

standard no ads for $19 a month, and premium no ads for $24 a month. So essentially you have all these tiers. And the premium, I guess you get like higher resolution HDR, but standard, I guess, is the same with or without ads. And when you have a gap of $11 like that,

between the standard with ads and standard without ads. It just makes me question how much pricing power they actually have because if they start raising the no ads cost, you might start getting people who start switching to diversion with ads. Because at some point they'll be like, okay, yeah, it's my favorite subscription, but we need to cut costs elsewhere. Everything's going up in price. I'm paying more for food.

You know what? We can save $11 a month by cutting down and just have, having to sit through some ads. And of course, they'll make money off of ads. But there's a reason why, you know, there's such a big discrepancy in pricing is that they make a whole lot more money with that more stable, no ad revenue than they do with that. Like every company makes more money in the non-ad version. Yeah, I find it hard to imagine that if you take the $8 equivalent that they're making, because those ads, they really don't get paid very much. on like a CPM,

like a cost per thousand views or whatever it may be. At least from my history of dealing with these types of advertisers, like I mean on YouTube, I think I get 11 Canadian dollars per thousand views. Yeah, it's not much. You make more money out of subscription.

There's a reason why YouTube is pushing their subscription model without ad. Like there's a reason they're doing that. There's a reason all these streaming platforms are doing. that is because it's just way more profitable and you don't have the lumpiness of ads even though they might have good demand for their ads in general it doesn't mean that the demand is as good and it's always the same pricing right this the pricing will vary so it is that is the main risk for me for netflix so anything else you wanted to add for netflix before we move on no that should be it

i guess the final thing i would say is the ad tier i think you're you're getting a lot of people who are much ad blind and really don't care about watching ads. Yeah, exactly. Like maybe like before cell phones or something, you'd have to kind of go through the pain. But I mean, now people just sit on their phone for 30 seconds and throw their phone down when the ads disappear and the show comes back on. So I think people don't really care. They would rather sign up for the ad side. I would probably have the ad subscription. I've just been too lazy to to downgrade it. So I have the full. But yeah, it's it is. It's, it's, it's, it's, it's, kind of a bearish element there to a certain degree, but they're also picking up a lot of people

who probably would not exist at all as a Netflix subscriber because they won't pay 20, but they'll pay six or seven, whatever it may be. But yeah, that's all I got. Yeah. 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 sweep. 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,

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they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move. You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Quest trade makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to avoid fees. Ready to invest, head over to questrate.com, open and fund your account with code TCI and receive $50. Conditions apply. We've been talking about

doing a trip to Halifax, and honestly, it feels like the perfect kind of Canadian summer getaway, walks along the waterfront, taking our daughter to the public gardens, finding a few good local spots to eat, and maybe making our way out to Peggy's Cove for one of those classic East Coast days. And while we're away doing that, our home in Ottawa would just be sitting empty. Summer is a great time for people to visit the city. Ottawa gets a reputation for being a little boring, but between the hot air balloon festival, patios in neighborhoods like the Glebe or Westboro, family-friendly, museums and the nature to explore just across a river in Gatno Park, there's a lot more going on than people might think. Listing our home on Airbnb could let another family experience our

beautiful city while we're away and bring in some extra income to put towards our own trip. Your home might be worth more than you think. Find out how much at Airbnb.ca.com. Okay, let's move on to the next name here. So a company, like I said, pretty small companies. company. I don't know if we maybe briefly mentioned it on the podcast, but the name is 5 and plus. So I have to give credit to my buddy J.C. was asking me about it, what I thought. And I guess his mom made a killing with the stock and was asking like, she should take some profits and stuff. So take that into consideration. But as I started digging into it, I was pretty, you know, pretty surprised by the company. It's actually like a very solid business. So you said,

based on our conversation pre-recording, you didn't really have any ideas on this one. So I got confused with this one with Superior Plus, which is a propane company, I think. Because as soon as you mentioned it, that's, yeah, this is not a propane company. I had it quite wrong. There's not a propane company. So it is a company that's listed in Canada. So this will be a little bit of a mini dive that I'll do so they operate in Canada the US Germany, China and Laos. They have two main segments, specialty semiconductors and performance materials. So the specialty semiconductor side is about three quarters of their revenue. That name of the segment is a bit misleading, but essentially they provide highly specialized

semiconductor compounds and wafers, which are a critical part of semiconductors. Now these are semiconductors that would be used. things like terrestrial renewable energy, space solar power, medical imaging, security and defense, and advanced electronics. So not the kind of semiconductor that are really being hyped up for AI data centers. So important to make the differentiation over here. And in their latest quarter, they saw strong demand on the semiconductor side of the business for terrestrial and space solar power.

that segment saw 37% revenue growth in the last quarter. The performance materials segment represents about a quarter of the revenue. And then I'll just show as well, again, the website for those that are interested in seeing kind of goes over the various segments and the business over here. So I encourage you if you're interested in this company, like make sure you go on the website. They do a pretty good job without getting too complex at explaining what the business. business is. And the performance materials segments, like I said, represents about a quarter of their revenues. They're specialized in materials that are used in medication, industrial application, specialty alloys, and commercial metals. In their latest quarter, they said that demand also

remains strong because of ongoing supply concerns due to the current geopolitical environments. And I think that's a key point here, which I'll touch on a bit later on. And the pricing for those performance material was also higher than they had anticipated. And that segment saw a 21% revenue growth. So really impressive on the growth at least in the last couple years. It's been, again, a company that growth has not been like super consistent, but it's definitely picked up in the last couple years here. So you're seeing this, especially since 2021. And just looking here at so since 2020, they're growing revenue at a clip of 15.4% or 15.5% per year. So definitely impressive. And looking at the numbers, a bit small dive in the numbers here. So they have a market cap of

$2.9 billion and an enterprise value of $3.05 billion. So they have about $150 million in debt, but net debt is about $100 million. And as I was saying that when I did my notes was earlier this morning. So market cap of, let's say, 2.8. So it's down about 8% today. Not quite sure, so I don't know if, I don't think they released earnings, but you could just be the markets. Yeah, I think they're just, there's a big sell-off going on right now, I think. Oh, yeah, there you go. So, yeah. I was like too busy doing researching this morning that I miss. I thought the market open in the green today, and we're recording this on July 29th, if anyone is wondering, because you'll, you'll be hearing this, I think on the holiday weekend for those in Ontario.

So back to 5N plus here. So they have, like I said, about 150 million in debt, but net debt is about 100 million. They could pay the debt with just one year worth of EBITA. So definitely pretty solid business here. And they generated 420 million worth of revenue over the last 12 months. From 2023 to 2025, the revenues have increased added. a clip of 27%, so even higher than what I just mentioned. And they are profitable both on in earnings and free cash flow basis. So really interesting, it's not a non-profitable company.

And earnings have more than triple over the last three years. So that is also a really interesting part is that they're profitable and it seems like things will be going, they're going in the right direction for the lack of better words. And I'll just share. here you'll be able to see net income so they had negative earnings in 2022 and then it's been growing at a very nice clip since 2023 very nice yeah I mean it doesn't have it doesn't have a lot of AI exposure I guess it's more like a energy play yeah it's more like a strategic play I would say yeah it's it's an energy play which at the same time does have a little bit of AI tied to it by I think in the context of what we're seeing what's happening in the Middle East and governments and countries making sure that they're actually more diversified in terms of energy, whether it's renewable energy, whether it's nuclear energy.

Like, this doesn't matter as long as you have stable supplies of energy and you're not overly reliant on one source. I think what the Middle East has highlighted is how critical that is. And some countries are better positioned than others. but I think a company like this should benefit. And of course, solar power into space, I don't think that's going to go down anytime soon as there's more and more satellites and just more things that are done general in space.

And how do you power these systems in space with solar power? Yeah. Yeah, I wonder if it's a candidate for the strong fund. I mean, it wouldn't really, that tiny wouldn't really move the needle all that much. It's only, I mean, it's still pretty much a small cap. You could call it a mid-cap, I guess, because it's over $2 billion, but pretty small company. I still call it a small cap nowadays with how things have grown. I mean, it's obviously not at as large of a scale, but it kind of reminds me of Celestica,

like how the company just kind of struggled up until 2023. And then, I mean, I guess this one doesn't have much AI exposure, but it kind of fell in its lap. And it's up, like, I can't even remember what it's up over the last while, 4,000 some percent, where this one I think was like an 8X off highs maybe. It's retraced quite a bit. But you would imagine just with it being a semiconductor company, there might be a bit of a premium put on the name just because of the industry it operates in.

Yeah, there you go. So yeah, it's about 755% the last three years. And the last year, 151, last five years, 1,000%. So it's been a big, big winner for those who have owned it for a little bit. And congratulations, if you have. I'm sure there are some listeners that know this company and I've owned it for a bit. And free cash flow wise, it's looking pretty good too. So they've been mainly free cash flow positive in the last 10 years.

A few years that were not. And in 2024, they saw a big drop in free cash flow. But as I was researching that to just understand why that happened when most of the years were actually free cash flow positive, apparently they were just building inventory to make sure that they would meet demand in 2025. And looking at free cash flow in 2025, which was their highest year in free cash flow, almost reaching 50 million, it's hard to disagree with that assessment. It does look like they planned that correctly. They do not have any dividend here. They have an average return of invested capital, uninvested capital of close to 6% over the last five years. So not crazy, but I don't know what the norm is for this kind of industry.

So I'm kind of not sure whether it's good or not. So just take that with a grain of salt. In terms of margins, last year was great. So they had 19% operating margins up from 11% in 2023 and 2024. So they were around that 11% mark. And last year they had 19%. And they seemed pretty confident. I was looking at the most recent call that going forward because they're achieving

economies of scales. And in terms of valuation, they aren't cheap. So they're trading at around 31 times Ford price to earnings and 44 times price to free cash flow. But the last thing here that's interesting is one of the largest shareholders actually Kaiser de Pestmanzschebec. So they're the ones who manage the Quebec pension plan. So they own 16% stake in 5N plus. And their headquarters in Montreal. So it does make sense because they had this dual mandate, Keiz de Plazman, to get the maximum returns.

also invest and support the Quebec economy. So it is kind of that dual mandate where they're not solely focused on maximizing returns. And in terms of competition, I think I alluded to this a little bit. They have some competitors, but very few can do everything it does. So companies such as UMacore IQE vital chemicals compete in the advanced materials. And with Boeing, Spectro Lab and Rocket Labs, Solero, they compete with its solar cell business. So it's satellite solar cell business. So its advantage is really that it can source, recycle, and purify metals, and then turn them into wafer compounds and even finish solar cells.

So they don't seem overly concerned with competition. They do talk about competition, but they seem to be in a very kind of enviable position here. Obviously, it's not a space I know super well. So just take this with a grain of salt. My overall take here is I definitely need to dig further on this kind of. company, the renewable power and space solar and the space solar power, that should continue doing well and see strong demand going forward. If you just think about what we talked earlier about what we're seeing on the geopolitical front right now, performance materials are also

critical for some important use cases. And I'm really thinking about, yeah, like you mentioned the Canada strong fund, but we were seeing it with the US. I know it's the Trump administration. I know Trump may not come back after his term and maybe they'll do Congress as well. well, but even despite that, I definitely see governments continuing to put a lot of emphasis on national security and strategically important materials. And I think they're right in that bucket of companies here. And they have some significant contracts with the U.S. Defense Department, some contracts that they got in the last few years. So even if there is competition, I think this is a company that might be viewed as quite critical by North American government. So

something to keep in mind, I wouldn't invest primarily because of that. But when you combine all of it, it's definitely a very compelling play. Not the cheapest, of course, but has room to grow quite a small cap. And it's probably very much underowned by funds because it's such a small company. So it is something that, you know, there's also upside where, you know, if it happens to three, four, five X from here, then it starts, you know, making different indices and being held by more fun. So it creates more demand for it. So that is another potential bullish take here. The bearish take is definitely valuation is not cheap. And you're also looking at something that there could be some competition. There could be some larger players that come in. But it seems.

seems very quite specialized and they seem to have the expertise that it may be difficult even for competition to come in that space and overtake them, especially as, yes, it's a growing market, but it still seems like a relatively small market. Yeah, and I think even if you think this is a Canadian ticker and potentially that would kind of keep the U.S. government away. I mean, they invested in, what was it, there was lithium Americas, which is a Canadian company that they invested in. And there was one more. I can't remember the name of it,

but they have taken some strategic positions in Canadian stocks. I think they own 5 or 6% of lithium Americans. But yeah, I'll have to dig into the company. I mean, I haven't paid much attention to them because, again,

I thought they distributed propane. So, yeah, but did I, have I scratched your curiosity? I think that's a, yeah, that's just what I'm hoping with this,

this overview is, obviously, do your own due diligence. This was, couple hours of research for me, so it's not a deep dive or anything like that. But hopefully I scratched, you know, enough interest for listeners that they'll kind of take this away, do their own research. And maybe they'll be like, okay, I like the idea it's not worth it. Or you know what? Maybe I'll start a small position. It makes a whole lot of sense. So that's the first

one for me. 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 everyday transactions like EFTs, bill payments, mobile check deposits, and 50 outgoing and 100 incoming free interrackee 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. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades,

you don't have to wait until you have thousands of dollars saved up to make a move. You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade makes the whole process seamless, allow you to focus on what really matters your investment strategy,

not trying to avoid fees. Ready to invest? Head over to Questrade.com, open and fund your account with code TCI and receive $50. Conditions apply. We've been talking about doing a trip to Halifax, and honestly, it feels like the perfect kind of Canadian summer getaway, walks along the waterfront,

taking our daughter to the public gardens, finding a few good local spots to eat, and maybe making our way out to Peggy's Cove for one of those classic East Coast days. And while we're away doing that, our home in Ottawa would just be sitting empty. Summer is a great time for people to visit, this city. Ottawa gets a reputation for being a little boring, but between the hot air balloon

festival, patios in neighborhoods like the Glebe or Westboro, family-friendly museums, and the nature to explore just across a river in Gatno Park, there's a lot more going on than people might think. Listing our home on Airbnb could let another family experience our beautiful city while we're away and bring in some extra income to put towards our own trip. Your home might be worth more than you think. Find out how much at Airbnb.ca.ca slash host. Let's move on to the next one here. Another relatively small cap Canadian company, right? Yeah, I think market cap of probably 1.7 billion, so this one would fall in the official small cap territory, and that is Jameson Wellness. And this is an interesting company, because again, I had mentioned at the start of the episode,

not a lot of people even know this one is publicly traded. I've been following it for probably two or years now. They had kind of a big level of growth coming out of the pandemic. Obviously, I think everybody listening knows what Jameson does, but they're, they're like a vitamin supplement company. Very established in Canada, the largest. The Canadian side of the business does not grow very fast. It's like low single digits, but it's also because they just have such a commanding share of the market here. And if you go to the, to the revenue and earnings chart for them. I mean, the company has been a pretty consistent double-digit earnings grower and revenue grower since pretty much its IPO. But the market really hasn't respected it all that much in terms of

share price. It's raised a dividend every year since its IPO if you're interested in that. So it's a dividend aristocrat raised its dividend every year since 2018. I think it's an eight or nine year streak now. And pretty much the main growth here is in China. It's virtually. untouched by Jameson. They're kind of getting into it right now over the last few years. And it's a huge market. I think the, I think what they had mentioned is the addressable market in Canada is four billion, whereas China is 30 billion. And it kind of makes sense. There's a lot more people there than here. Competition would be higher in there. But if I would sum up the company's strategy in kind of a single sentence, it would be to utilize the moat brand powered as in Canada as the core of the business.

and then it kind of uses that stability to fund international markets, which it's growing 30% plus on a much smaller base. But the reason I have Jameson on the stocks to watch list is it kind of, it gives an opportunity to look at a pretty high quality company and potentially get a bit of arbitrage from a takeover offer. So there is a private offer that Jameson has gotten to buy the company. it was probably a couple weeks ago, maybe two or three weeks ago.

They came out with an announcement and said that somebody had approached them to buy the company. They didn't give any price. So the offer is there, but the price is just pure speculation. But if you look to analysts, which I know are kind of, I mean, I don't put much weighting into this, but there was a few analysts that said

that the bio price would likely be in the $2 to $2.5 billion range. So if it ended up getting $2.5 billion plus, it would put the company at a little bit over $58 a share and around, I think it's a 40% premium on today's price. Keep in mind that is, I would say that as absolute best case scenario, it's only one analyst that figured the buyout would be $2.5 billion. Most of them are probably talking like low twos. And I do want to make it clear, I have absolutely no idea how likely a buyout is. There could be a 5% chance. There could be a 50% chance, zero clue.

But there is interest. And we have seen plenty of small cap companies here in Canada kind of get scooped up by private equity for pretty big premiums. Andrew Peller was only, that was probably a month ago now. But I think they got picked up at like a 60, 70% plus premium. Nuve was another one they got taken private. Park Lawn was one that I was kind of involved in and was buying on those lows. They ended up getting taken private at, I think it was a 62 or 64% premium. So our small caps tend to trade at much more attractive valuations. There's just not, there's not really a lot of interest in them.

There's a lot lower competition for deals. So they're pretty popular targets. The company has hired BMO and Canacord to kind of help it navigate the deal, discuss with interested parties, things like that. So we'll all kind of see where that goes. A takeover deal is made a little bit more possible by Jameson's, I guess you could say wide structure in terms of ownership. So the largest shareholder is only around 15% of the company and insiders own very little of it.

So there's not a lot of large controlling shareholders that could, I don't know, reject the deal you feel as good or kind of accept a deal that you feel as bad. You're more likely to get a fair deal in this case. And if the deal didn't go down, you kind of own a defensive company with a reasonable runway for growth at a pretty reasonable valuation. It only trades at 19x expected earnings. and it's kind of picked up its pace of growth after slowdown coming out of the pandemic. So three-year compound annual growth rates on earnings and free cash flow are in the high and low teens respectively. So this is a company that's it's growing at a fairly decent clip, but I think it's just such a, not only is it an undercover Canadian small cap, but it's just such a boring industry that I don't think a lot of people pay attention to it.

There are risks. I kind of see the buyout situation as a heads you win. tails you don't lose, but not in like a literal sense because if the deal didn't go through, it would likely go down a bit because as you can see by this chart here, there's definitely a bit of a takeover premium that's coming into the price. If you look at the where the stock kind of bottomed here and then launched up, that was pretty much, I don't want to say all because of the buyout rumor, but a large chunk of it was. So I think it's kind of a tails you don't lose situation in the fact that it's not like you're buying some bad penny stock or anything, hoping for a

takeover. It's a cash flowing company growing at double digits. The other concern would be the debt. So they made a big acquisition of a U.S. supplement company in 2022 called U-Thory, and a lot of that debt was taken on right before interest rates launched. I believe they had a lot of it floating. So it kind of worked, it worked a bit to get this in order, but the debt is pretty high. I'd like to see them pay the debt down faster rather than raise the dividend. I think that would be a better option. The payout ratio in terms of the dividend is is very healthy. I think it's around 60% of free cash flow. So they have room to do both. But in my opinion, they'd probably be much better off just getting that debt balance down. So you can see in 2021, they were sitting at around

$150 million in debt. And you can tell when they made the acquisition. Yeah. And then they kind of bought, they repaid a bunch of debt and then it kind of ticked back up again. So they generate enough free cash flow that I think they should be a more, a bit more aggressive on this front. But yeah, the other risk would be is if you bought this just solely for the arbitrage play on a potential acquisition, if it comes in at like $45 a share or something like that, pretty low. You probably haven't been compensated well enough for the risk you took on because if it doesn't go through, it's probably dropping, I don't know, I want to say just pure speculation,

probably down to the high 30s. And I have contemplated taking a flyer out on this one and hope. hopes a deal comes. And if it doesn't, I kind of own a low volatility company growing at a pretty good pace. But I think it's an interesting play right now. There aren't a ton of interesting Canadian small caps. And I think right now this is probably one of them. Yeah. And 5N. 5N plus. The propane of every retailer. Now, I'm just kidding, man. But by definition, yeah, Dan's definition. No, I think it was a good overview for a company I'm familiar with. But again, it's never one that's really excited me all that much.

But, you know, if money excites you, maybe that this is one of those opportunities. So I'm not saying this is a, you know, I think it's a valuable point. And I think another or the radar company, I think you're right too in Canada. I think we, I'm guilty of that. Maybe you are as well. But I think sometimes we might benefit from having a closer look to those smaller caps company in Canada because they are overlooked and you know there's a lot of crap here too just like anywhere but there's also i think some hidden gems where they're just being overlooked they're too small they're

in canada too small to be owned by funds and because they're in canada they're overlooked oftentimes by u.s investors or internationally so it does give us Canadian investor a bit of an edge of course you tend to not get the same kind of multiple premiums that you'd get for similar companies elsewhere but still could make a whole lot of sense. So I think, yeah, worth keeping on the watch list here. Yep. That's all I got for Jameson. Okay.

Okay. So now let's go on. Finish with a company here that I'm sure a lot of people are familiar with. So it is a gold miner. So Nico Eagle, I actually, the reason why I started looking at this last week. So for Joint TCI subscribers, don't know that I post my parents' portfolio moves every month. We also post our own moves every single month, which we'll be posting in a few days. And as I was doing my parents' portfolio, because they recently sold a condo, their condo, and now they're renting.

So they got an infusion of cash that they're investing, and I managed their portfolio for them. So I was looking at, you know, for the most part, just rebalancing what they already had with the existing cash, but also wanting to keep a slightly higher cash buffer in the form of mostly U.S. Treasury bills. so they get a little more stability and also some dry powder if there's some big market correction. And they have a decent amount of exposure to gold and mining companies in the form of just gold ETSs, but also Franco and Nevada are the two biggest holding. But I was looking at like Nico Eagle and honestly, ticker AEM, by the way, for those who are not familiar, listed both in Canada in the U.S. so dual listed. And it is looking very attractive.

I mean, gold miners in general are looking pretty attractive right now. It may not be a surprise where gold is, you know, around $44,000 announced earlier that I checked today. Maybe I'll double check here. Okay, gold is stayed around the same price when I checked earlier today. So just pretty much at $4,000 announced about 25% lower, 26% lower than the highs that were hit earlier in the year in January. but Agneco is down 43% since its highs. So definitely a lot more. Not surprising because gold miners tend to be seen as a leverage play on goals.

So it does make sense because they're all in sustainable costs. We'll typically stay fairly stable. They'll increase a bit with inflation. But all in sustainable costs is just a really good metrics when you're looking at gold miners or miners in general. Just because it gives you an idea of how much it cost them. like the all in cost not just the the operating cost per ounce but it includes a bunch of other costs like administrative costs as well so it gives you a really good idea and like neko eagle its cost is like between their guiding for this year of a range of 1400 to 1550 per ounce of course

this is all in us dollars and when i checked their q1 earnings it was actually 1483 so right within that bracket but now you start comparing that with other major gold miners and And they're all in the range of 1600 to 2000. So I'm thinking here, Newmont, Kinross, Barrick. So Agneco is really at the top of the list when it comes to all-insustainable costs. And that means they're just really printing money, even with gold, having dropped to 4K. And production's another thing where it's really interesting when it starts, you start looking at NICO Eagle. So they expect production to be fairly stable for the next few years.

but then it should start going in 2030. And they also have a really good advantage because the vast majority of their production is coming from Canada. I think it's 83 something percent and the rest are in lower jurisdiction. So they really have something strong in terms of business model.

And when you start looking here at EGECO and I'll just put up a here. So in terms of cash on the balance sheet, so they have a 2.7. billion net cash position. So they have little to know debt. They've really released a debt over time, which again, it's good to see when you look at miners because one of the things that people will know if they have looked at miners in the past is that they tend to, you know, they have to invest and oftentimes take on debt. And that's why Franklin Nevada is such a good

business model is because they'll provide some of that financing in exchange for some of the production that comes out and a pre pre-established price or in exchange of a royalty. But Ego Eagle essentially has repaid all of its debt for a company as large as NICO. When you have close to $3 billion on cash on the balance sheet, only $300 million in debt, I mean, you're essentially, you have no debt. Like that's pretty much. Yeah. It's a net cash by a large amount. By a large amount. And they're looking to return about 40% of free cash flow to shareholders in the form of dividends and buybacks. So that's really interesting.

So for those who are, you know, dividend investor, this is a pretty, you know, it's a pretty interesting play, if you ask me, because their dividend is paying 1.1%. And if even if gold drops to 3,500 or stays around 4,000, I mean, they're just generating gobs of free cash. So in 2025, they generated 4,000. 4.3 billion in free cash flow. Last 12 months, 4.5 billion. Of course, the price of gold,

in 2025, I assume that the price of gold was probably around 3,500 on average, because they got that big run up at the end of the year. But even if they're around 4, 4, 45, 4, 4.5 billion in terms of free cash flow, they're just, yeah, they're just printing money. So you can really see them continue to increase that dividend. They've bought back a whole lot of shares as well. The share, buyback? I mean, were they strategic, but we're just kind of systematic where we're just putting 40% our free cash flow towards dividend and share buybacks. I don't know. They made a decent amount of share repurchases in Q1 of this year, which obviously not necessarily the best use of capital given where the price was. But as long as they continued in Q2 as the price continued

to go down, I think that's fair. They're just being systematic about it and just, you know, investing a certain amount in chair buybacks and the rest in dividends. That's fine by me. And they seem to have that 40% target. So really something to like about them. And honestly, I'm debating of trimming my Franco Nevada position to buy Agniko. So not, I think it's around 6% of my portfolio. So it's a pretty big position. So I might trim it to like around 4% to Dan turn around and buy Agnico. Because even though Franco is the more stable business and I would say long periods of time probably the higher quality just because of the business model. I still think that EGneco probably has more upside than Franco Nevada here.

And you're paid to wait. That's the other nice thing. I think it's kind of, it's funny because Canadian investors love, let's just say, oil and gas plays for pretty much the exact same reason. Like they generate boatloads of free cash flow and they return most of it back to shareholders. But a lot of people don't own gold exposure. all, especially gold miners, probably, I don't know. It's just been...

You're right. It seems like there's more people that are really into the oil and gas company versus the gold miners, especially when they're both like very important sectors in Canada. Yeah. There just seems to be a more of a following for the oil and gas company. Yeah. Yeah. I mean, energy prices, I mean, gold did not do well for a very long time.

So, I mean, I imagine that's some of it. But if you get sustained gold prices and Agniko is putting out, you know, five plus billion in free cash flow every year and they're returning 40% of it back, their net cash, you know, 2.7 billion, whatever it is, there's a lot more room for consolidation like mergers acquisitions in this space than I would say there is in the oil and gas space and they got a ton of money to do so. And then, I mean, I don't know, they're not very high yielding. The energy companies are much higher yielding.

Yeah, I think Canadians love their dividends. Yeah. But you could get into a similar situation where if gold prices stay maintained and Agneco keeps putting out this free cash flow and they have nowhere to put it, which it kind of looks like to a certain degree they don't at this point in time. You could see that free cash flow payback to shareholders kind of tick up. And I mean, you could be looking at a lot of buybacks, a lot of a lot of dividend growth, maybe acquisitions, things like that.

It's kind of a similar situation. I just think people, I don't know, oil is, well, oil stocks in general are loved here, especially. I mean, I'm from Alberta. Yeah. People love pipelines, oil stocks, but I don't know a lot of people who hold gold. And right now, they're putting off insane amounts of free cash flow. And it's probably headed back to shareholders, probably more so in the form. Honestly, I think a lot of people got burned, probably got in around the peak.

Late last year, early 2020. Now they're looking at if they bought miners are down, you know, 40, 50 percent. Some miners are down more than Agneco. Agneco is like the blue chip in the sector. There's some other major companies, like the ones I mentioned, Umad, Kinross, Berrig, they're all major companies that are in the space. But, you know, these smaller companies, some of them are down, yeah, 50% plus. If you own the actual metal, you're down 26%.

So I think, you know, a lot of people are probably just snake bit, whereas if you started buying oil and gas company during that period of time, you're probably looking at 20, 25, 30 percent profits, if not more, if you include the dividends. So I think that's probably part of it is some people may have just gotten burned, just gotten on the hype train when it was high up there. And at the end of the day, I think, look, who knows where the price of gold will go. But I think there is a case to be made. And I've seen a lot of data supporting that where when the Middle East conflict started,

a lot of countries were trying to secure oil and they had to sell reserves to be able to buy that oil. And a lot of those reserves are in gold. So there was a lot of selling pressure happening in the gold market. So you can make a case that sure, maybe gold will be depressed. Maybe I'll go down another 10, 15% from here. But with the state of the world now, can you really not see demand for gold picking back up within the next cold two, three, four years, especially when you factor in inflation risk, especially when you factor in, you know, less trust in the U.S. as well. So I think when you factor all of these things, there's good reason to be

bullish about Dignico Eagle. And if not, I mean, if it stays stagnant for a year or two, you're being paid to wait. So, you know, if it stays around this space, I mean, I would not be surprised to see a 10, 20% dividend increase, you know, in the next year either. Yeah. And I think if gold contains. used to go down, a lot of these miners will kind of be crushed in price and then you have Agneco sitting on no debt and 2.7 billion in cash. Like there's going to be deals to be made, which eventually will, you know, just generate more cash flow for the company. So if you, if you do have a long-term approach on like kind of blue chip miners, the ones that are actually

well-ran because there's a lot of terribly ran gold mining companies in, in Canada. But if you look to these premier plays, they're in a very good position right now, but ultimately they're at the mercy of gold prices. Like if you look at a gold miner and it's down on the day, you can pretty much guarantee that you look at the price of gold, it's going to be down. They typically fall more than the price of gold. That's just kind of the way they work.

But, I mean, the underlying business is top notch. I mean, I think since they merged with Kirkland back in 2022, I think they're up 200 some percent. At peaks, I think they would have been up over 400. some percent. It's, yeah, it's been a good run by them. And I think they're, I personally think they're the best gold company almost on the planet, really. I used to own them, sold it way too early, but I'm, I am looking at it again. Yeah, exactly. And I'm just kind of comparing it to Newmont here. And Newmont does a lot more dead, although similar net cash position. If I'm comparing the two

here short term. Yeah, so similar net cash position, as, you know, has the two, but Newmont is only down 30% since the peak, although it's still trading at a lower valuation kind of compared to earnings than Agneco Eagle. So Agneco had more of a run-up than Newmont has, but like I mentioned earlier, Agneco has a much better, like, all-insustainable costs. And that is one of the top metrics that you're looking at. Like, if you're looking at miners, this should be like, you know, if you're looking at them, like one of the key, APIs you want to keep your eye on is definitely that all in sustainable costs. So Newmont's one I was just looking at. So it's looking quite good even compared to Newman. Newmont has dead, but it has

more cash on the balance sheet. So the net cash position quite similar. Well, and I think the thing is you're getting lower all in sustaining costs through Agneco and you also get safe jurisdictions. I think it's Canada, Mexico. And Australia, I think for them. Yeah, I think so. Yeah, I think that's, yeah. I know Newman has a lot of like Latin American exposure and I think they're in Africa as well. I just quickly look that up and you'll usually get lower costs there, but you'll also get much higher volatility. I mean, we look to Franco with the, the COBRA situation. That was not actually Franco. That was, what was the company's name? First Quantum, I think. Yeah, first quantum. Where they just had the, yeah, they just had their mind outright shut down. You're probably not going to

see that in, you know, Canada or Australia, whatever it may be. So that may be. So that may be. So that makes it a little more stable. Usually comes with higher costs, but with Agneco, they still maintain some pretty low costs. Yeah, like just as we read this up, Newmont is 1680 per ounce approximately. Yeah. Versus an Angniko that's closer to 1500. So that's a pretty significant. That's like a 10% difference.

So it's pretty significant different at in the jurisdictions like you said. So yeah, so I think that wraps it up. Let us know if you like these kind of episodes where we talk about stocks on a radar. We had a few ideas in terms of the companies you wanted to talk about, but some of the companies we talked about quite a bit on the podcast before. So we wanted to bring some fresh ideas. So let us know in the comments if you're on YouTube, whether you like that or shoot us an email or reach out to us on Twitter. But we appreciate all the support. But always encourage you to give your feedback if there's types of episodes that you like.

Maybe we'll do more of that. So yeah, it was fun episode. Thank you so much for listening. And we will be back for a regular episode. for news and earnings on Thursday.