Small-cap stocks have significantly outperformed their large-cap peers so far this year but valuations remain at a massive discount, so what names should be on your radar? On this episode of In the Money with Amber Kanwar, Aubrey Hearn, Senior Vice-President, Portfolio Manager & Lead – U.S. & Small Cap Equities at CI Global Asset Management, makes the case that the small-cap opportunity is far from over.
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Three battleground stocks with upside potential:
Live Nation is the world’s leading live entertainment company, owning Ticketmaster and numerous amphitheaters while maintaining relationships with ~90% of top global artists.
- Powerful Flywheel in Live Events: Combines venue ownership, ticketing, artist relationships, sponsorships, and concessions into a resilient ecosystem that continues growing double digits as consumers prioritize experiences.
- Regulatory Risk Largely Priced In and Low Probability of Breakup: DOJ precedent strongly favors no breakup; any additional settlements are manageable in size, creating a buying opportunity amid the overhang.
- Durable Growth at Reasonable Multiple: Secular tailwinds from social media/Instagram-driven demand for live events support double-digit growth for years, with the stock trading at only 12-13x EV/EBITDA.
Pollard Banknote (PBL)
Pollard Banknote prints lottery tickets (traditional scratch cards) for governments and provinces while rapidly expanding its high-growth iLottery (online lottery) business.
- Defensive, Long-Term Contract Base: Decades-old relationships with major jurisdictions (Ontario, California, etc.) create an oligopoly-like barrier to entry with 8-10 year contracts and limited new competition.
- Explosive iLottery Growth Overlay: Online lottery business is “on fire,” with major new wins (Kansas, Belgium) and expanded California share (30% → 70%), driving high-single-digit overall growth and faster EBITDA expansion.
- Stunning Valuation Disconnect: Trades at just 4.8x EV/EBITDA despite expected double-digit earnings growth potential and recent major contract victories, despite a temporary Michigan loss that spooked investors.
Colliers (CIGI)
Colliers is a leading commercial real estate services and engineering consulting firm that provides brokerage, leasing, and professional services globally.
- Rebounding Transaction Volumes: Commercial real estate activity is recovering sharply (mid-teens growth seen at peers), supported by loose credit markets and properties finally changing hands after years of malaise.
- Improving Office Return Trends: Leasing activity is stabilizing as companies return to offices (now ~85% of pre-pandemic levels in many markets), with the downward trend having ended.
- AI Tailwind for Consulting & Brokerage: Engineering consulting and complex commercial deals benefit from AI tools that enhance (rather than replace) human expertise in design, sign-off, and nuanced negotiations.
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