Lyle Stein, President, Forvest Global Wealth Management
Focus: North American and global stocks
Top Picks: AltaGas, Micron, Sprott Physical Gold Trust
MARKET OUTLOOK:
The first quarter of 2026 was one of the craziest markets I have experienced in my four-decade career. Two wars, one snatching, tariffs, and U.S. Federal Reserve suspense – all in a span of 13 weeks! Unprecedented.
What are the takeaways, and what is the setup for Q2 and the remainder of 2026?
- Have an investment view, not a trading view. Ignore the noise. Watch earnings and interest rates. Our take is that earnings expectations are too high, and that interest rates (U.S. 10-year yield) are stuck in a 4 to 4.5 per cent range. Central banks are ham struck.
- Markets are expensive. While price–earnings ratio has fallen from 22 to 20, overall market is not cheap. Mag Seven stocks have seen multiples fall considerably, but consumer stocks are now quite overvalued with multiples exceeding tech. If market is to go higher, tech and Mag Seven must lead. Otherwise market could go sideways for a long time.
- Stagflation. Oil drives the world economy. Oil prices just ratcheted up. Question is whether they will fall back to US$60, especially as mid-east crude is repriced. Knock-on effects of the Strait of Hormuz and Iran to be felt for a long time. Growth will be lower. Oil will take inflation higher. Stagflation is bad for stocks and all asset classes.
- “K-Shaped Economy” remains the driving force.
- “HALO” is the place to be - Hard Asset, Low Obsolescence stocks. Own energy, pipelines, resource stocks that pay dividends and have long-term staying power.
- Low return environment – get your return from dividends.
- 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:
AltaGas (ALA TSX)
A classic HALO stock. AltaGas is well positioned in its two key markets on either side of the continent. In eastern U.S., AltaGas owns Washington Gas, distributor of gas to D.C. area, including Loudoun County, VA, largest data-centre concentration in the east of the U.S. Natural gas is backup fuel. In Western Canada operates a growing liquefied petroleum gas (LPG) export business, supplying Japan and China with needed propane. Growing dividend (yield is 2.6 per cent), fueled by 10 per cent earnings before interest, taxes, depreciation and amortization (EBITDA) growth from low obsolescence assets.
Micron (MU NASD)
Pure play on “inference” chips for artificial intelligence (AI) world. Nvidia is “compute” side of AI, Micron is memory. Historically a commodity business, dynamic random-access memory (DRAM) needs of AI servers is six to eight times that of regular servers. With Samsung (45 per cent global share) and Hynix (25 per cent) leading market, Micron has 20 per cent, and is only U.S. supplier of size. DRAM is extremely tight and margins have exploded. Question is how long the memory cycle lasts, and this is controversial, especially with Google announcement of memory compression algorithm, TurboQuant. All said an done, Micron should see revenue growth of 60 per cent plus (from US$108 billion to US$180 billion) in near term with earnings doubling to over US$100 billion. Market cap is US$425 billion, under five times price–earnings ratio. Cap Ex to fuel growth is US$35 billion, so lots of free cash to buy back shares. Gotta have some cheap technology in the portfolio!
Sprott Physical Gold Trust (PHYS TSX)
Do you own life insurance? Sprott Physical Gold Trust is portfolio insurance. “Everyone should own five per cent of their portfolio in gold, and hope it goes to zero” A powerful statement on the ultimate diversifying asset. We own eight per cent or so in client portfolios as “calamity” protection. The move over the past two years was stunning; while we can’t see a repeat, we also don’t see a major correction. Too much debt globally, with no fiscal discipline. Any economic slowdown will blow out deficits, blow up currencies and allow gold to rise as the reserve currency of choice.
With gold stored at Canadian mint, and physical redemption option (for large owners), Sprott Physical Gold Trust is our preferred way to play bullion.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| ALA TSX | Y | Y | Y |
| MU NASD | Y | Y | Y |
| PHYS TSX | Y | Y | Y |
PAST PICKS: JULY 18, 2025
Agnico Eagle (AEM TSX)
Then: $117.13
Now: $216.27
Return: 84%
Total Return: 85%
AMD (AMD NASD)
Then: US$156.99
Now: US$233.16
Return: 49%
Total Return: 49%
Vermilion Energy (VET TSX)
Then: $10.83
Now: $18.25
Return: 69%
Total Return: 72%
Total Return Average: 69%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| AEM TSX | Y | Y | Y |
| AMD NASD | N | N | N |
| VET TSX | Y | Y | Y |
