Gordon Reid’s Top Picks for April 9, 2025

Gordon Reid, president and CEO, Goodreid Investment Counsel

FOCUS: U.S. equities

Top Picks: Freeport-McMoRan, Meta, Morgan Stanley

MARKET OUTLOOK:

Commentary around being a long-term investor and being prepared with a suitable asset mix and a well-balanced portfolio, while true, is not what most investors are looking for in environments like this. They want to be told, “everything will be alright.” Basic human instincts kick in, and feelings of safety and comfort are paramount. As with other event-driven markets such as the COVID-19 pandemic market of 2020 and the great financial crisis market in 2008, the stark truth is that once pried away from our mother’s apron, there is no going back.

Actions during these times define our financial outcome. If you came into U.S. President Donald Trump’s tariff meltdown overexposed with risk scenarios flashing red, then you must consider taking some of that risk off. If, however, you have investment balance, let all the chapters be written. As with COVID-19 and the financial crisis, we have always found our way through. The proof: six weeks ago, equity markets were at all-time highs.

Although the Trump administration is challenging the system, the U.S. continues to use a system of checks and balances to operate. Politically, elected representatives are becoming more vocal and more involved in the actions surrounding trade. Mid-term elections are around the corner and the stark reality is that under the stated Trump plan, there is going to be short term pain before the expected long-term gain. That is a proven failed political strategy. Economically, uncertainty is the enemy of businesses and markets. Expectations of a recession are rising daily. A poor economy is not in the best interest of the Trump administration.

The likely course is compromise. Trump’s playbook has always been to threaten, intimidate and scare his opponent with the objective of extracting greater concessions. The recent Canadian experience followed that exact playbook. Goodreid’s approach: stay the course with well balanced portfolios and financially sound companies.

• Market-moving news, fast: Get the BNN Bloomberg App now
• Sign up for the Market Call Top Picks newsletter at bnnbloomberg.ca/subscribe

TOP PICKS:

Freeport-McMoRan (FCX NYSE)

FCX’s stock price and copper prices are fluid. Stockpiling in advance of Trump’s tariffs led copper to over $5 per pound but that trade has now unwound. FCX has had some operational issues that are pressuring its stock price. A higher likelihood of a recession is also in the mix. This confusing situation has resulted in fire sale prices for FCX. Long-term secular tailwinds will prevail. Strong buy!

Meta (META NASD)

Meta has its game back, after a diversion into the Metaverse, a space that was a mystery to most investors. A leader in social media, META has its issues, but making money isn’t one of them. Any hiccups going forward are likely to involve regulatory issues or management missteps, as we think they will largely avoid tariff issues. When your active daily users capture one in two people on earth, there’s a lot that can go right.

Morgan Stanley (MS NYSE)

The concern of a slower economy caused by a recession is likely misplaced, providing a golden opportunity to own a banking and wealth management powerhouse at a very attractive price. Deals on the tariff front will provide greater clarity, stabilizing markets and allowing Trump to enact part two of his economic playbook, which involves lessened regulatory pressure, lower taxes and a pro-growth agenda.

PAST PICKS: April 17, 2024

Bank of America (BAC NYSE)

• Then: US$35.23
• Now: US$33.22
• Return: -6%
• Total Return: -3%

Chevron (CVX NYSE)

• Then: US$156.40
• Now: US$134.68
• Return: -14%
• Total Return: -10%

Dycom (DY NYSE)

• Then: US$134.75
• Now: US$142.31
• Return: 6%
• Total Return: 6%

Total Return Average: -2%