Darren Sissons, partner and portfolio manager at Campbell, Lee & Ross Investment Management
FOCUS: global and technology stocks
Top Picks: AstraZeneca, Canadian Pacific Kansas City, Linde plc
MARKET OUTLOOK:
While 2024 market outperformance was largely U.S. election spending driven by the incumbent Democratics and the hopeful Republicans, 2025 has primarily been U.S. President Donald Trump’s driven market volatility. The executive orders shattered tranquil multi-decade trading relationships across the globe as have bully-boy rhetoric like the unpalatable 51st state rhetoric. However, what is often missed with Trump presidencies is his change agency and wealth catalyst impacts. Priced off 2024 highs, U.S. growth stocks, which largely drove U.S. indices for the lion’s share of the last decade, were clearly over valued and carrying high and in many cases unsustainable valuation multiples. The second Trump reset created buying opportunities across growth particularly but also for value and growth at a reasonable price (GARP) market segments. Across sectors, biotechnology and pharmaceuticals look attractively priced as do portions of software, med-technology, and logistics.
The first Trump administration lesson was to focus on the key target, which remains China, and to short or exit that category but increase exposure to categories of lesser significance to policy changes and to sectors benefitting from improved policy support.
Caution, however, is warranted on equities as presently markets are clearly pricing in a successful tariff plan conclusion. That may be overly optimistic as the U.K. is the only major trading partner to negotiate a trade deal. All other major trading partners are either politely or otherwise ignoring the tariff offensive so little else has changed. On fixed income, the critical question remains, is the inflation spike a one-time, nonrecurring impact once normalized or a new normal?
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TOP PICKS:
AstraZeneca (AZN NASD)
A pharmaceutical company specializing in oncology, cardiometabolic, respiratory, vaccines and rare diseases. It had two major new drug approvals in the last six months and has a drug approval pipeline of multiple new commercialization opportunities near term. Secondly, it has a dividend yielding 2.4 per cent. Thirdly it has proven research and development expertise augmented by an active tuck-in acquisition strategy. Forth, an annualized Canadian dollar ten-year total return of 12.3 per cent per annum.
Canadian Pacific Kansas City (CP TSX)
A pan North America network with rail operations in Canada, the U.S., and Mexico. Secondly, given the integrated nature of North American supply chains, tariff noise is just that. Commodities, and completed and partially completed finished goods will continue to traverse its network. Thirdly, buybacks were suspended in 2023 pending the integration of the Kansas City Southern acquisition. In 2025 the company announced plans to buyback 37 million shares or four per cent of market capitalization. The buyback is likely to be a recurring event.
Linde plc (LIN NASD)
An industrial gas company providing critical gaseous chemicals to a diverse range of industries from oxygen for hospitals, argon and acetylene for welding, hydrogen for refineries, and through CO2 used in fountain drinks. Secondly, a defensive business model that emphasizes long term often take or pay contracts. Thirdly, a growth is typically generated by committing to new projects plus a multi-year, recurring profit spread. Fourthly, an annualized Canadian dollar total return of 17.9 per cent over ten years.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| AZN NASD | Y | Y | Y |
| CP TSX | Y | Y | Y |
| LIN NASD | Y | Y | Y |
PAST PICKS: April 30, 2024
British American Tobacco (BTI NYSE)
- Then: US$29.42
- Now: US$42.42
- Return: 44%
- Total Return: 55%
Enbridge (ENB TSX)
- Then: $48.95
- Now: $62.74
- Return: 28%
- Total Return: 38%
Givaudan (GIVN SW)
- Then: CHF3946.00
- Now: CHF4106.00
- Return: 4%
- Total Return: 6%
Total Return Average: 33%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| BTI NYSE | Y | Y | Y |
| ENB TSX | Y | Y | Y |
| GIBN SW | Y | Y | Y |
