Jordan Zinberg, president and CEO, Bedford Park Capital
FOCUS: Canadian small and mid-cap stocks
Top Picks: Propel, Lumine, NTG
MARKET OUTLOOK:
Equity investors enjoyed a very strong market throughout 2024, however 2025 has been a different story thus far. Following a relatively benign January, U.S. President Donald Trump’s tariffs caused chaos in stock markets globally and served as a clear reminder that stocks don’t go straight up. Markets appear to be stabilizing; however, investors need to think carefully about each stock they own and ensure they have a solid understanding of both direct and indirect tariff impacts.
Given the currently opportunity set, there is no reason to hold stocks with either severe or unclear impacts to margins due to tariffs. Within the small and mid cap Canadian equity market where we focus, it is very easy to find high quality growth stocks that are now trading on single digit earnings multiples. As an aggregate, first quarter earnings for the Canadian companies we follow have been solid thus far. Unless we see a major deterioration in earnings or guidance as we move through the remainder of the year, the setup for investors is very attractive.
- 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:
Propel Holdings (PRL TSX)
Propel is an online lender that provides customers in U.S., Canada, and the U.K. with fast access to installment loans and lines of credit. The company continues to grow rapidly and recently announced a substantial upsize to their credit facility at a significantly lower interest rate. Propel offers investors impressive top and bottom-line growth, a growing dividend, and trades at just seven times 2026 earnings.
Lumine Group (LMN TSX)
Lumine was spun out of Constellation Software in 2023 and provides mission critical software to customers in the media and communications industries. Despite possessing many similarities, when compared to both Constellation Software and Topicus.com (the other Constellation spin off), Lumine shares have underperformed over the past year. The reason the shares have lagged is likely due to a slowdown in mergers and acquisitions, however, as soon as that re-accelerates the stock should re-rate higher.
NTG Clarity Networks (NCI TSX)
NTG is an IT solutions company that is based in Canada but provides services primarily to customers in the Middle East, specifically Saudi Arabia. With a diversified customer base across several sectors, NTG has recently been winning increasingly larger contracts resulting in revenue growth of over 100 per cent last year. The company is not well known to investors however it is profitable and growing rapidly.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| PRL TSX | Y | Y | Y |
| LMN TSX | Y | Y | Y |
| NCI TSX | Y | Y | Y |
PAST PICKS: April 8, 2024
Goeasy (GSY TSX)
- Then: $169.00
- Now: $159.96
- Return: -5%
- Total Return: -2%
Enterprise Group (E TSX)
- Then: $1.23
- Now: $1.48
- Return: 20%
- Total Return: 20%
Topicus.com (TOI TSX)
- Then: $124.00
- Now: $162.55
- Return: 31%
- Total Return: 31%
Total Return Average: 16%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| GSY TSX | Y | Y | Y |
| E TSX | Y | Y | Y |
| TOI TSX | Y | Y | Y |
