Bruce Campbell, President & Portfolio Manager, StoneCastle Investment Management
Focus: Canadian equities
Top picks: Kraken Robotics, Zedcor, MDA Space
MARKET OUTLOOK:
Investors have just experienced one of the sharpest “V-shaped” market recoveries in history, offering both excitement and challenges. Short-term indicators, including the CNN Fear & Greed Index, NAAIM Net Exposure, and the SentimenTrader Smart Money/Dumb Money Confidence gauge, suggest markets may be overheated in the near term.
However, stepping back reveals a more encouraging picture. Powerful longer-term signals, like the Zweig Breadth Thrust observed in April – a historically strong bullish indicator – suggest substantial market gains could still lie ahead. Positive trends in money supply growth and bullish momentum signals, such as the monthly MACD, further reinforce this optimistic outlook.
Adding to this, July is traditionally one of the strongest months of the year, creating opportunities amidst the complexity. For long-term, buy-and-hold investors, a bit of market turbulence shouldn’t overshadow the brighter road ahead. Yet, active investors may find the real excitement lies in the renewed sector rotation – something we haven’t witnessed in nearly three years. This rotation presents compelling opportunities for those ready to dig deeper.
- 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:
Kraken Robotics (PNG TSX)
PNG is a marine technology company that produces sensors, sonar systems, power systems and underwater robotic systems for civil and military applications. The company is growing topline and bottom line at an impressive rate and has a strong balance sheet that can be used for organic and acquisition growth.
Zedcor (ZDC TSX)
ZDC provides mobile surveillance systems for industrial and commercial clients. The demand for their product continues to ramp up as witnessed by today’s corporate update. Tower production up, tower utilization strong and guidance for increased towers means management sees continued growth from larger enterprise customers with further geographic expansion.
MDA Space (MDA TSX)
Produces components for multiple verticals in the space sector. Positive secular trends will continue to accelerate the business of space and provide strong growth for the sector. MDA leads the industry in many areas and has been growing at impressive rates in the last several years. Strong company backlog and guidance increase visibility for the future.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| PNG TSX | N | N | Y |
| ZDC TSX | N | N | Y |
| MDA TSX | N | N | Y |
