Two Canadian Stocks Deep Dive: One Boring, One Riding the AI Boom
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What is the overall investment thesis for CCL Industries and Hammond Power Solutions?
It was a low margin, low growth business that had AI effectively fall into its lap. So without the data center build out, this one is nowhere close to where it is today. This is a company that I think would absolutely take it on the chin if data center build out slowed. But when you pay your execs in cash based on the stock price, it gets very, very dicey because. This is all fine and dandy when the stock trades at $10, but when it goes from $10 to $150,
In a few years. Under the radar, it's a relatively small company and market cap of 16 billion. And it's listed in Canada. And something I did not expect to see. So it includes polymor banknotes substrate. So essentially, it's material that's used to make banknotes, so money, fiat money as we know it. It's used in 24 countries, covering 80 denominations. Canadian banknotes are actually using that technology. So the 5, 10, 20, 50, and $100 bills. Welcome to the Canadian Investor Podcast. I'm Simon Belange and I'm here with Dan Kent. We have a fun episode today. We're doing a deep dive each. So I'm going to be starting off here with CCL. This is a Canadian listed company. And the ticker is CCL.b. So I'll do a deep dive on that and then then you'll go over what's the company that you're covering today.
Hammond Power Solutions. It's uh big AI beneficiary over the last few years. And there's a lot of lot of people asking questions about it because it's down Quite a bit over the last while, I think forty percent ish over the last
bit here. Yeah, yeah, and that's the ticker HPa.to, right? HPS, so two Canadian companies. I don't know too much about Hammond Power, so I'll be listening closely for you. But CCL, I did not know all that much about this company, and let's get started here. It's uh it's a pretty impressive company. I'll be I'll be quite honest. Like a lot of people might not be super familiar with it, but it has some pretty good numbers, and I'll go over that. I'll explain what the business is, the different segments, I'll go over The CEO is history with the business, go over some of the risk, and then going forward, whether I think it's a a good potential business or investment to make or not. So, first of all, what did they do?
Well, CCL actually stands for Connecticut Chemical Limited. So it's kind of funny that it's listed in Canada, but that's the name it stands for. It has four main segments. So the first one is The core business. So pretty much just traditional CCL. Second one is Avery checkpoint. And then the last big segment is Enovia. And I'll go over each here and make sure for those listening on audio, feel free to hop on YouTube. This video will be posted on YouTube, like we post our Monday episodes. Of course, join TCI subscribers will get it early on join TCI. CCI. So the various segments here. So you see CCL, Avery, Checkpoint System, Enovia, those are the main segments of the business. So let's start here with the core business CCL.
And you'll see that it's pretty, it's a pretty big chunk of the business. So CCL, the core business, generated 63% of revenue last year and 62% the year before. So it's by far the most important part of the business. There are several businesses within that segment. So the first one would be home and personal care. So it's a global integrated network of label and tube manufacturing facilities and is used by many of the world's leading home and personal care brands. I would encourage people that are interested in the business. They actually have like a three-minute video on the about. On the page of the the company just to get to know them. And you'll see all the big brands that actually do business with them.
And there's some of the best well-known brands in the world. The second part here is healthcare and specialty. So that part of the business focuses on the needs of the world's healthcare, pharma, chemical, and other highly regulated industries where secure, accurate, on Product labeling and instruction instructional compliance is a strategic imperative. The next one here is food and beverage.
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Chapters
6 chapters
1
What is the overall investment thesis for CCL Industries and Hammond Power Solutions?
0:00–4:37
2
How is CCL Industries structured and what are its main business segments?
4:37–12:51
3
What role do polymer banknote substrates and RFID technology play in CCL’s revenue mix?
12:51–24:56
4
How has CCL’s revenue growth, margins, and free‑cash‑flow performance trended over the past five years?
24:56–35:30
5
What are the key risks associated with CCL’s acquisition strategy and management tenure?
35:30–43:32
6
How does Hammond Power Solutions generate earnings from dry‑type transformers and data‑center demand?
43:32–50:31
Speakers
2 identifiedMore from The Canadian Investor
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