Jordan Zinberg, President and CEO, Bedford Park Capital
Focus: Canadian small and mid-cap stocks
Top picks: ZOOMD Technologies, Propel Holdings, Constellation Software
MARKET OUTLOOK:
Equity markets have reversed some notable long-standing trends in 2025.
For the first time in several years, Canadian equities are outperforming U.S. equities. Also, for the first time in several years, the S&P/TSX Small Cap Index and the S&P/TSX Venture Index are outperforming the S&P/TSX Composite. The key driver of performance in Canadian markets year-to-date has been the mining sector.
Market breadth in Canada has been extremely narrow, with mining stocks attracting the majority of capital flows and trading volumes.
Stocks outside the materials sector, particularly small-cap growth stocks, have generally not participated in this market rally at all and many have negative share price returns in 2025.
The current equity market backdrop presents an outstanding opportunity for investors within the Canadian small and mid cap growth universe.
Many companies have continued to demonstrate very strong operating results while their valuation multiples have contracted substantially.
Investors are currently able to purchase profitable growth stocks at single digit earnings multiples, which will set the stage for significant gains in the future as valuations normalize.
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TOP PICKS:
ZOOMD Technologies (ZOMD TSX)
Zoomd is a fast-growing technology company that serves the needs of customers in the digital marketing industry.
A growing list of high-profile brands use Zoomd’s platform to unify various media sources in order to customize and streamline ad campaign management.
The company is growing revenue and profits extremely quickly and insider ownership is high, however, it is not well known to investors and trades at a very attractive valuation.
Propel Holdings (PRL TSX)
Propel is an online lender that provides customers in US, Canada, and the U.K. with fast access to installment loans and lines of credit.
Management recently reduced their full year outlook for 2025 slightly; however, the company is still growing at a very rapid pace, and we believe the share price decline presents an excellent entry point for investors. Propel offers impressive top and bottom-line growth, a growing dividend, and trades at just six times 2026 earnings.
Constellation Software (CSU TSX)
Shares of constellation software are down 25 per cent year to date due to a surprise CEO resignation combined with a belief among some investors that AI is a significant threat to the business.
This has been one of the top performing stocks in Canada for many years and continues to deliver high margins and a very high return on equity. The sell off in the shares this year gives investors the opportunity to acquire shares at a valuation we have not seen in many years.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| ZOMD TSX | Y | Y | Y |
| PRL TSX | Y | Y | Y |
| CSU TSX | Y | Y | Y |
PAST PICKS: JAN. 15, 2025
Goeasy (GSY TSX)
Then: $173.93
Now: $132.45
Return: -24%
Total Return: -21%
Mainstreet Equity (MEQ TSX)
Then: $203.01
Now: $184.55
Return: -9%
Total Return: -9%
Source Energy Services (SHLE TSX)
Then: $15.33
Now: $12.81
Return: -16%
Total Return: -16%
Total Return Average: -15%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| GSY TSX | Y | Y | Y |
| MEQ TSX | Y | Y | Y |
| SHLE TSX | Y | Y | Y |
