John Zechner’s Top Picks for Sept. 23, 2026

John Zechner, Chairman and Founder, J Zechner Associates

Focus: North American Large Caps

Top Picks: Capital Power, Rogers Communications, Apotex Health

MARKET OUTLOOK:

We have a cautious investment stance. Outside of concerns about valuations and excessively bullish sentiment we are wary about the sustainability of U.S. economic growth on what we view as a ‘wobbly two-legged stool’ of growth.

Half of the growth in the U.S. economy over the past year has come from the artificial intelligence (AI) spending boom, and the other half has been derived by the equity wealth effect on consumer spending at the top tier.

In client portfolios we added U.S. long term bonds holdings as a hedge against ongoing stock market gains as well as our expectations that economic growth is slowing down and core inflations is receding back to its target level. Gold stocks continue to be a large holding for the same reasons but also as protection against a deterioration in the U.S. dollar.

We continue to hold a healthy weight in technology stocks since they are delivering the strongest earnings growth across the entire market. However, we have sold most holdings related to ongoing data centre spending and a semiconductor market where we see risks.

Hyperscalers such as Amazon, Alphabet, Microsoft are showing accelerating cloud computing growth at rates exceeding 50 per cent which shows how well they are monetizing their AI spending.

Meanwhile, Meta stands out as a great value within the sector with 3.6 billion daily active users of its ‘family of apps’ which gives it tremendous leverage in the mobile advertising world. We continue to hold Canadian energy stocks due to their low valuation and growing favour among international investors due to geo-political stability in Canada.

We sold our bank stocks in both Canada and the U.S. valuations are at excessive and unsustainable levels. Growth has been driven largely by capital markets activities, trading and wealth management, which have all been helped by strong stock markets. However, this over-dependence on continued strong markets is a concern.

The consumer sector also looks to be on shaky ground, particularly with the trade war with the U.S. heating up. We prefer defensive holdings such as power utilities, alternative energy and telecom, where the valuations are at the low end of historical ranges and the dividend yields remains attractive.

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TOP PICKS:

Capital Power (CPX TSX)

The company Canada’s largest independent power producer, generating 12 gigawatts via a 35-plant fleet. It has most of its assets in Alberta, one of two markets in North America that are unregulated. It has great scope to add capacity to meet increasing growth of data centres in Alberta with 70 per cent being gas-fired generation and 20 per cent renewable sources, which they can then connect to the grid. They did a timely U.S. acquisition last year in the PJM region where electricity rates have recently been increased. The stock trades around nine times operating cash flow and has a 4.7 per cent dividend yield.

Rogers Communications (RCI-B TSX)

The telecom sector looks like it has started to turn around with wireless price competition among the four players subsiding and companies focusing solely on their core areas of strength. Rogers stands out for a number of reasons: the strength of its consolidated sports assets in a market where valuations keep increasing and the fact that it is cutting back on capex and therefore generating substantial free cash flow which will allow it to pay down the debt from the Shaw acquisition and then begin to increase its dividend again.

Apotex Health (APTX TSX)

We looked into the business model and results as a private company and decided to participate in the initial public offering (IPO) earlier this year. The generics business has been very profitable and the stock was priced at a very reasonable valuation. Despite the recent overhang from the secondary stock sales (private equity buyer and the Sherman family) we see strong growth going forward from branded specialty pharmaceuticals, biosimilar pharmaceuticals and their position as the only generic producer of GLP-1 drugs in Canada. The Toronto Stock Exchange (TSX) Health Care index has not had a strong institutional offering in over a decade so Apotex should be able to fill this gap and continue to attract new buyers.

PAST PICKS: SEPT. 9, 2025

Torex Gold (TXG TSX)

Then: $51.56

Now: $69.07

Return: 34%

Total Return: 35%

Shopify (SHOP TSX)

Then: $198.83

Now: $208.94

Return: 5%

Total Return: 5%

MDA Space (MDA TSX)

Then: $32.99

Now: $44.69

Return: 35%

Total Return: 35%

Total Return Average: 25%