Corporate earnings continue to surprise on the upside, with major U.S. companies showing strong year-over-year sales and profit growth. Still, investors are keeping an eye on the potential for increased market volatility and the upcoming federal budget.
BNN Bloomberg spoke with Denis Taillefer, portfolio manager at Caldwell Investment Management, about earnings themes, his constructive outlook on markets and why he sees opportunities in stocks such as K92 Mining, AtkinsRéalis and Vertiv.
Key Takeaways
- Roughly 70 per cent of S&P 500 companies have reported, showing strong sales and double-digit earnings growth.
- Taillefer expects markets to stay constructive but warns volatility could rise amid high valuations and trade tensions.
- Canada’s budget could mark a turning point, with reforms and reinvestment needed to spur productivity and growth.
- Franco-Nevada remains a long-term gold play, while K92 Mining offers higher growth and takeover potential.
- AtkinsRéalis stands out for its growing nuclear division, improving balance sheet and future M&A prospects.
Read the full transcript below:
ANDREW: We’re awaiting more earnings this week. Franco-Nevada is set to report after the bell today, and of course, the Canadian budget looms tomorrow. Let’s bring in Denis Taillefer, portfolio manager at Caldwell Investment Management. Denis, thanks very much for joining us. Start off, if you would, with Franco-Nevada. It’s a less volatile stock than some of the gold producers, but a favourite way among many to play the metal.
DENIS: It’s a very high-quality company if you’re looking for exposure to gold and precious metals in a way that’s a lot less volatile. Franco-Nevada is a great option. They’re the largest precious metals royalty company in the world, with well over 400 assets globally. They’re well diversified, carry fairly low risk and have a strong balance sheet.
So from the perspective of someone looking for a core gold position to hold long-term, Franco-Nevada is probably a good way to go. We tend to play gold a little differently. Our Canadian strategy is momentum-based, so we look for high-growth, catalyst-rich names. Franco-Nevada doesn’t quite fit that mould, but it’s a very high-quality company and certainly makes sense for someone seeking a long-term position in gold.
ANDREW: It’s up about 56 per cent this year, which sounds great, but the gold index in Toronto has doubled. It’s lagged some of the individual names. Just to get the budget out of the way, what would you like to see tomorrow from the federal government?
DENIS: We have an opportunity to reset how the Canadian economy grows going forward. We’re really looking for policies centred on growth — some tax changes, deregulation to make it easier to get projects moving, and incentives to draw investment back into the country.
Canada has fallen behind on productivity, so we need to get growth projects underway to return to a stronger economic trajectory. We’re expecting a fairly significant deficit, but I think markets will take it in stride. As long as the policies focus on true growth, the budget should be well received.
ANDREW: You’ve got some other stocks on your radar, including AtkinsRéalis. What interests you there?
DENIS: Atkins has a very strong nuclear division. A couple of years ago, it made up about 14 per cent of revenue; now it’s closer to 18 per cent and is the fastest-growing part of the business. Atkins is an engineering firm — and we prefer engineering to construction because there’s less risk and better growth visibility.
They’re still moving away from some construction projects on their books, but once that’s cleaned up, they’ll be a pure engineering play. Growth prospects across the engineering sector are strong, particularly in nuclear. Atkins has improved its balance sheet, which should open the door to more mergers and acquisitions. We also think it trades at a slight discount to the market and could benefit from divesting some non-core businesses.
ANDREW: Going back to gold, K92 Mining has caught your eye. They produce in Papua New Guinea.
DENIS: This one fits our style — companies with strong catalysts. K92 is a small-cap miner, around $4.5 billion, producing mainly from Papua New Guinea. They’re expanding production and expect significant growth over the next few years. They produced about 140,000 ounces of gold last year and should be well over 200,000 within a couple of years.
Their EBITDA is set to more than double in that time. They’ve got a clean balance sheet and are self-financing through cash flow, with plenty of exploration upside. Even if gold prices stay flat, there’s strong organic growth ahead. As K92 moves from a junior to a mid-tier miner, it should attract more investor attention.
We’re also seeing more M&A in both precious metals and copper. Given K92’s growth profile, it could become a compelling takeout candidate.
ANDREW: Denis, thank you very much. That’s Denis Taillefer, portfolio manager at Caldwell Investment Management.
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This BNN Bloomberg summary and transcript of the Nov. 3, 2025 interview with Denis Taillefer 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.
