Ryan Modesto’s Top Picks for May 26, 2026

Ryan Modesto, Portfolio Manager, i2i Capital Management

Focus: North American stocks

Top Picks: Kratos Defense and Security Solutions, Talen Energy, NVent Electric

MARKET OUTLOOK:

Investors are always so focused on what can or is going wrong in markets and the economy, perhaps we should consider what can go right?

Whether it is related to the prospect of a resolution of ongoing wars, an economic boom tied to reshoring and the artificial intelligence (AI) infrastructure buildout, increasing economic activity through enablement and efficiencies from AI tools, or just good old-fashioned earnings growth, there are many trends that should keep an investor optimistic.

While the U.S. market is certainly more tied to many of these trends we do view Canadian markets as requiring a bit more discernment, as the Toronto Stock Exchange (TSX) currently consists of 33 per cent slower growth financials (sensitive to economic activity), and 37 per cent energy and materials (also sensitive to economic activity). While the energy and material exposure worked great for the TSX last year, they are sectors that are at the whims of commodity prices and a sideways commodity sector for a few years could also mean a sideways TSX index.

But have no fear, as there are great, growing companies in both Canada and the U.S. that can grow well in excess of the economy and even regardless of the economy, you just have to find them.

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TOP PICKS:

Kratos Defense and Security Solutions (KTOS NASDAQ)

Defence companies have seen weakness recently on prospects of decreasing geopolitical tensions, but countries around the world are looking at increasing their defence spending. They are also increasingly looking at drone technologies, and KTOS caters to this trend. KTOS is one of the few well-established pure-play drone companies and is expecting earnings per share (EPS) growth in excess of 30 per cent for the next three years. Quarter to quarter earnings results can be ‘chunky’ but we think the valuation after recent weakness looks quite attractive here.

Talen Energy (TLN NASDAQ)

Independent power producers are one of the remaining spaces with AI exposure that are trading at objectively cheap levels. TLN sports a forward price-to-earnings (P/E) ratio of 14 times while seeing high growth in earnings and revenues. Meanwhile, the growth profile has good visibility and should be reliable, justifying a premium to the valuation. The company is targeting 50 per cent of new capacity to support data centres.

NVent Electric (NVT NYSE)

NVT provides electrical and infrastructure solutions to various industries. Currently they are seeing significant demand from the AI and data center sectors which is helping them realize double-digit growth. Demand in the sector remains high while supply is constrained, helping them maintain strong margins with increasing backlog. At 32 times forward earnings, they trade cheaper than many peers while facing the same industry wide tailwinds.

PAST PICKS: MARCH 5, 2026

Ouster (OUST NASDAQ)

Then: US$21.18

Now: US$44.73

Return: 111%

Total Return: 111%

Intuit (INTU NASDAQ)

Then: US$466.79

Now: US$315.83

Return: -32%

Total Return: -32%

Celsius (CELH NASDAQ)

Then: US$43.69

Now: US$29.67

Return: -32%

Total Return: -32%

Total Return Average: 16%