Hot Picks: Three stocks to buy as consumers pull back, says analyst

Consumers are feeling the strain on both sides of the border, with lower-income households cutting back on discretionary spending. Yet some companies remain resilient, backed by steady demand and loyal customer bases.

BNN Bloomberg spoke with Ernest Wong, head of research at Baskin Wealth Management, who shared his outlook on Canadian Natural Resources and Tourmaline Oil earnings and named three stocks he expects to perform well even as consumer spending weakens.

Key Takeaways

• Live Nation’s concert business remains recession-resilient, with venue ownership helping capture more event revenue and expand concert access.
• Domino’s Pizza continues to gain market share in the fast-food sector, supported by partnerships with delivery aggregators and a revamped loyalty program.
• Costco’s consistent same-store sales and strong pricing power make it a defensive retail play amid economic uncertainty.
• The retailer’s expansion in e-commerce, international markets and third-party advertising adds new growth potential.
• Canadian Natural Resources and Tourmaline Oil earnings reinforce ongoing strength in Canada’s energy sector, driven by steady production and long-term LNG prospects.

Read the full transcript below:

ANDREW: Let’s get to Hot Picks. Our guest has three stocks on his radar that he says could be winners in a weak consumer environment. We’re joined by Ernest Wong, head of research at Baskin Wealth Management. Great to talk to you again, Ernest. Thanks very much. You say there’s a real risk here that consumers will pull back. Are you talking about both the U.S. and Canada?

ERNEST: Yes, I think in the U.S. especially, we’re really seeing low-end consumers struggling. Yesterday, McDonald’s said lower-income consumers were spending double-digit declines at their restaurants, really trying to pull in and squeeze every dollar they have.

ANDREW: Your first idea here is Live Nation — much maligned, obviously, over high ticket prices — but you do see potential as an investment.

ERNEST: Yes. Live Nation’s concerts have historically been one of the most recession-resilient forms of consumer spending because going to see your favourite artist is an irreplaceable experience. People may cut restaurant spending or travel, but they still want to see their favourite artists perform live, and Live Nation is at the centre of that. The company has built its business and is increasingly owning the venues as well. The stock slipped a little after earnings, but we think there’s a lot of growth ahead.

ANDREW: That’s interesting. I’d forgotten they’re actually buying up venues — talk about vertical integration.

ERNEST: Yes. The strategy with owning their venues is that they can capture more of the ancillary revenue around events, such as beer sales, parking, and other on-site services. It also allows Live Nation to provide concert infrastructure in places that may not already have an arena or stadium, enabling artists to perform there as well.

ANDREW: Your next idea has the symbol DPZ. Tell us what they do and why you like them.

ERNEST: DPZ is Domino’s Pizza, the largest pizza chain in the world. Pizza is one of the best categories in fast food because it’s an affordable way to feed an entire family. Domino’s has done a terrific job over time of gaining market share, both against large chains and independents. We’re seeing evidence of that now, with Pizza Hut reportedly up for sale. We think it’s a high-quality business trading at a reasonable valuation.

ANDREW: Why has the stock dropped, though, over the past while?

ERNEST: I think it’s due to ongoing concerns over the lower-end consumer. Certainly, Domino’s isn’t immune to those challenges. But we like that it has a lot of levers to drive growth, including a revamped loyalty program and partnerships with DoorDash and Uber to tap into the aggregator market. We think those factors will continue to drive growth.

ANDREW: Finally, Costco. We know about its loyal customer base — what else attracts you?

ERNEST: Costco does well in good times and bad times. In good times, people shop more; in bad times, people go to Costco because of the low prices. Costco has the most consistent same-store sales growth among retailers. We saw that last night when it reported October figures — about eight per cent same-store sales growth.

We think Costco has opportunities to grow its e-commerce business and open new stores in both the U.S. and international markets. More recently, it’s begun selling third-party ads, using consumer data from members’ shopping habits to drive additional sales.

ANDREW: It’s interesting — companies like Amazon have leveraged their huge online presence to sell ads, and now Costco is jumping aboard.

ERNEST: Exactly. Costco was relatively late in recognizing that potential, but we think there’s significant upside as it builds out e-commerce and uses member data to develop targeted ads.

ANDREW: Before we let you go, you also follow Canadian Natural Resources and Tourmaline Oil. Any thoughts on the latest numbers from Canadian Natural?

ERNEST: Canadian Natural had solid production results. Oil prices were a little weak this quarter, but what we like about Canadian Natural is its ability to grow production consistently in a low-risk way. Earlier this week, it completed a swap with Shell to gain full ownership of the Athabasca oil sands project. That’s adding production in properties it already knows well — low-risk growth in assets it understands.

ANDREW: And just finally, we’re tight for time — Tourmaline. Would you be a buyer of that stock?

ERNEST: We’ve been in a period of weaker gas prices lately. The market’s concerned about the lower special dividend, but we think Tourmaline is well positioned for liquefied natural gas going forward and is building its business the right way for that.

ANDREW: They also announced a 10-year supply deal with British Gas owner Centrica. Ernest, thank you very much.

ERNEST: Thank you.

ANDREW: Ernest Wong, head of research at Baskin Wealth Management.

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This BNN Bloomberg summary and transcript of the Nov. 6, 2025 interview with Ernest Wong are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.