Dan Rohinton’s Top Picks for May 2, 2025

Dan Rohinton, vice-president and portfolio manager iA Global Asset Management

FOCUS: Canadian and global large caps

Top Picks: Amazon, GE Aerospace, Danaher

MARKET OUTLOOK:

While we have observed a relatively robust U.S. and global economic backdrop given the significant uncertainty after “liberation day” we remain vigilant to the ongoing risks that may be building across the global economy. There is a potential bifurcation of the global economy into different speeds as specific economies are more trade dependent than others.

Resurgent efforts by China to stimulate its economy may be necessary to resuscitate growth domestically. However, this comes with its own set of risks given the significant impact China has on global commodity demand, especially affecting the Canadian market. If these monetary and fiscal initiatives fail, repercussions could be negative for base metals and oil consumption. The rise of AI continues to be a focus with high hopes pinned on larger firms investing in artificial intelligence. This current earnings season is showing us that there remains a strong appetite across a wide spectrum of companies to test and do preliminary engagement with “inference” workloads. The cloud computing earnings results are a testament to this trend.

To sum it up, the global stock market is filled with opportunities and risks. Although individual company fundamentals and macroeconomic trends may appear to strike a balance for investing, market crosscurrents and global economic complexities may lead to a choppier path in the coming quarters. We are approaching the current environment with a degree of caution looking ahead while also maintaining a balanced set of holdings across both defensive and offensively positioned equities.

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TOP PICKS:

Amazon (AMZN NASDAQ):

Diversified e-commerce retailer and dominant hyper-scaler are slowly but surely shifting towards profitability from unchecked investment despite the demands for AI within AWS. Potential challengers across discount verticals led by Temu and Shein have not directly impacted the core retail franchise which continues to execute on share capture while driving group EBITDA. Broad breadth of levers to continue driving profitability (I.e. Advertising, AWS scaling) and robust absolute and relative growth make AMZN a compelling opportunity in the consumer discretionary space.

GE Aerospace (GE NYSE):

Leading supplier of engines to the main airline manufacturers in the world with a dominant and increasing market share. This is an extremely complicated industry and will face tariff risks and other complications from a geopolitical standpoint. However, there are very few industries where you can confidently say the runway looks out a full decade. You have the opportunity through these geopolitical headlines to continue building a position in an exceptional business over the long-term.

Danaher (DHR NYSE):

Attractive balance sheet at a time when valuations are coming down in an industry with some assets that may shake loose in the future. Bioprocessing recovery has been a long-time coming and although the longer-term growth rates aren’t what they used to be this is still a defensive and secular growing part of the market. World class management team that has successfully navigated and learned from their background in the industrial world to today.

PAST PICKS: July 25, 2024

Linde PLC (LIN NASD)

• Then: US$443.03
• Now: US$452.73
• Return: 2%
• Total Return: 3%

Mastercard (MA NYSE)

• Then: US$429.60
• Now: US$557.70
• Return: 28%
• Total Return: 30%

TRYG A/S (TRYG CPH)

• Then: DKK$147.60
• Now: DKK$160.50
• Return: 9%
• Total Return: 13%

Total Return Average: 15%