Bruce Campbell, President & Portfolio Manager, StoneCastle Investment Management
Focus: Canadian stocks
Top picks: Abaxx Technologies, Tenaz Energy, Happy Belly Food
MARKET OUTLOOK:
Markets have performed well this year, with the biggest gains coming from the precious metals and mining sectors. This strength has pushed the TSX ahead of the S&P 500 year to date. The question many investors are asking now is, what comes next?
There is a lot of talk about bubbles, whether in precious metals, artificial intelligence, or meme stocks. While there may be some areas showing bubble-like activity, overall sentiment does not suggest this is widespread. Our technical top-down indicators also do not support that view. In fact, several of the indicators we track at StoneCastle have started to turn higher following the deep selloff in April tied to Liberation Day.
Earnings season will be important to watch. For the first time in several years, analysts expect earnings growth in the mid-cap and small-cap sectors. At the same time, the U.S. central bank lowered rates in September and is expected to lower them again in October. That will provide more stimulus to support a broader rally across both company size and sectors.
We continue to find compelling opportunities across all parts of the market. It is important to constantly monitor your individual positions and the overall markets. If individual companies break down fundamentally or technically, be sure to take action in your portfolio. From a top-down perspective, it is important to track key indicators and always know whether your portfolio is on offence, neutral, or defence.
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TOP PICKS:
Abaxx Technologies (ABXX CBOE)
Abaxx is a financial technology company focused on commodity futures trading and settlement. The company started trading in LNG and carbon futures contracts. Starting a regulated futures exchange and clearing house is not an easy task that the management has worked on for the last eight years. The company has garnered investments into the company from the who’s who of investing world.
Tenaz Energy (TNZ TSX)
Tenaz is a Calgary‑based energy company focused on sustainably acquiring and developing oil and gas assets in Canada and the Netherlands, including semi‑conventional reservoirs in Alberta and offshore North Sea gas operations. The company recently completed an acquisition of Dutch and German North Sea assets that have been neglected by the former owners and offer significant upside potential. In addition, the company has an M&A focus and a balance sheet to support their M&A strategy.
Happy Belly Food (HBFG TSX)
Happy Belly focuses on buying growing consumer food brands. The company is led by a management team with extensive experience in restaurant growth, M&A and brand expansion. Their model is built on low capex, high growth brands. The company has demonstrated strong financial results as they continue to expand their store count. Management is incentivized directly with shareholders through an ambitious performance plan tied to stock price.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| ABXX | N | N | Y |
| TNZ | N | N | Y |
| HBFG | N | N | Y |
PAST PICKS: JULY 9, 2025
Kraken Robotics (PNG TSX)
Then: $3.41
Now: $6.80
Return: 99%
Total Return: 99%
Zedcor (ZDC TSX)
Then: $4.29
Now: $6.02
Return: 40%
Total Return: 40%
MDA Space (MDA TSX)
Then: $39.12
Now: $35.05
Return: -10%
Total Return: -10%
Total Return Average: 43%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| PNG | N | N | Y |
| ZDC | N | N | Y |
| MDA | N | N | Y |
