Bruce Murray, CEO & CIO, Murray Wealth Group
Focus: North American & global equities
Top picks: Major Drilling, Amadeus IT Group SA, Alphabet
MARKET OUTLOOK:
It’s been a wonderful year for equity investors; our global equity fund has enjoyed a 27.6 per cent return to the end of October.
U.S. President Donald Trump’s tariffs while creating significant difficulty for some industries did not cause the global dislocation feared and within the U.S.A. with imports being a small part of the overall economy (<14 per cent) tariffs have done little economic damage.
In the meantime, the stock markets remain fueled by the race to be the leader in Artificial Intelligence (AI) . We remain convinced that AI will be the stock markets’ key focus for the next several years as successful cellphone and leading internet applications were for the last decade. With this I refer to Google, Facebook, and Apple as leading examples.
The power needed to run AI will lead to a multiyear boon for equipment supplier and utility operators. We hold Canadian based, equipment supplier Hammond Power Solutions in our global growth fund . As gas will likely be the easiest early source of energy, Alberta should be well positioned be a major beneficiary of both the physical power plants and increased demand for gas. At TMWG, we have wide exposure to Canadian gas through Tourmaline in our global growth fund as well as several gas power related plays in our income growth fund.
We also see much of the rest of the market selling at attractive valuations, many industrial companies from Airbus and Boeing to bus maker NFI struggling to get the supply chain and stock prices back to pre-pandemic levels.
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TOP PICKS:
Major Drilling (MDI TSX)
Higher metal prices have led to a major increase in mineral exploration with a plethora of mining companies bringing prospects forth to investors and raising a significant amount of exploration funds.
It seems there were two to three issues a day since the summer. Global exploration fund raising was depressed the last three years. Major drilling as the world’s leading exploration driller will be the beneficiary of these funds as these companies execute confirmatory drilling on their prospects. The stock traded north of US$20 in a previous cycle, and I believe the company is much stronger today and will surpass that peak.
Amadeus IT Group SA (AMS MC)
A global information technology provider through their key product labeled global distribution system (GDS) which is the leading reservation system and provides single point access for booking airline seats, hotel rooms and other travel related services. Over half the world’s major airlines use GDS and it is gaining share with the major hotel chains.
Its two major competitors are struggling financially, and AMA continues to gain share.
This is a very high-quality company approaching monopoly status. We see continuing revenue growth of seven to eight per cent annually as travel continues to expand. Margins should also gradually expand. We believe it will hold its low 20’s price-to-earnings (p/e) ratio. We view this company as a long-term sustainable grower and core holding as the tourism and travel grow. we see 15 per cent p/e stock appreciation potential over the next few years.
Continued implementation of AI could allow for extraordinary cost reduction and hence higher than forecast profitability.
Alphabet (GOOG NASD)
Alphabet struggled for about a year from spring 2024 through spring 2025 as the market sentiment felt their Google division was struggling to keep up in the race for AI leadership. This all changed with the latest releases of the Gemini product are now at least comparable to Open Ai the assumed leader in this race. Google is considered to have an infrastructure advantage as they own and design their own data centres and have proprietary technology and down to designing many of their own silicon chips. They are also a company with the massive cash flow to support the capital expenditures required to stay in the AI race. Open Ai while having the technical knowledge does not have access to in-house data centres or a massive cash flow. We suspect the street analysts will be raising target prices well through 2026. The current high target is US$350 for 20 per cent plus one year return. This may be low.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MDI TSX | Y | Y | Y |
| AMS MC | Y | Y | Y |
| GOOG NASD | Y | Y | Y |
PAST PICKS: JANUARY 16, 2025
Air Canada (AC TSX)
Then: $20.41
Now: $18.35
Return: -10%
Total Return: -10%
Uber (UBER NYSE)
Then: US$68.58
Now: US$93.10
Return: 36%
Total Return: 36%
META (META NASD)
Then: US$611.30
Now: US$621.44
Return: 2%
Total Return: 2%
Total Return Average: 9%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| AC TSX | Y | Y | Y |
| UBER NYSE | Y | Y | Y |
| META NASD | Y | Y | Y |
