Brendan Caldwell, President & CEO, Caldwell Investment Management
Focus: North American large caps
Top picks: CACI International, InterDigital, eBay
MARKET OUTLOOK:
Equity markets enter 2026 with a constructive but more balanced setup following a strong 2025. Global growth is expected to remain solid, with the U.S. economy continuing to show resilience as inflation moderates and financial conditions ease.
Monetary policy is shifting from restrictive toward more neutral, providing ongoing support for risk assets, though the pace of further easing is likely to be gradual and data dependent.
Corporate fundamentals remain healthy. Earnings growth is expected to be the primary driver of equity returns going forward, as valuations in several markets are already elevated and leave less room for multiple expansion.
Encouragingly, earnings strength has broadened beyond a narrow set of mega-cap stocks, reflecting improving participation across sectors tied to capital investment, industrial activity, and productivity gains. Structural investment themes, particularly around AI, data infrastructure, and electrification, continue to support medium-term growth and capital spending.
These trends underpin productivity improvements but also raise expectations, increasing sensitivity to any earnings shortfalls or delays in project execution.
In Canada, market performance has been supported by moderating inflation and firm commodity prices. Resource-oriented sectors and industrials have benefited from global demand and infrastructure spending, while Financials remain closely tied to domestic economic momentum and housing conditions. Risks remain as sticky components of inflation, slowing growth, geopolitical tensions, and policy uncertainty could all contribute to higher volatility.
In this environment, we remain focused on high-quality companies with strong earnings power, disciplined capital allocation, and proven ability to navigate volatility, which we believe are best positioned to deliver sustainable returns.
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TOP PICKS:
CACI International (CACI NYSE)
What they do?
CACI International is a U.S. government contractor providing mission-critical tech and services in areas such as cybersecurity, electronic warfare, counter-drone systems, and IT modernization
Why we like them?
It has attractive exposure to areas such as cybersecurity and electronic warfare which are top spending priorities for U.S. defence and intelligence agencies
Growing backlog provides solid near/mid-term revenue visibility; 92 per cent of 2026 revenue either secured or “re-compete” bids
Sustainable margin expansion driven by a mix shift to higher-margin services (think defense tech consulting services, space and “EW” business)
Space capabilities recently expanded with acquisition of ARKA, a leading provider of earth observation sensors for satellite constellations, for $2.6B; ARKA operates at ~20 per cent Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margins vs. CACI at ~11 per cent.
InterDigital (IDCC NDAQ)
What they do?
InterDigital is a global leader in foundational tech leveraging a 30,000-patent portfolio of cellular (3G/4G/5G), Wi-Fi, and video standards to license mission-critical intellectual property
Why we like them?
It has growing annual recurring revenue (ARR) driven by continued smartphone licensing deal/renewal progress
Increasing likelihood of executing a streaming license deal which should set precedent for all other major streamers
Improving research and development efficiency: new CEO, and subsequent new head of R&D (both multi-decade QCOM alum), increasingly focused on improving commercial viability of R&D efforts which has driven strong IP portfolio growth - new patent filings up three times from 2020 to 2023
Strong potential operating margin upside with addition of streaming license deals (note IDCC has ~100% gross margins)
eBay (EBAY NDAQ)
What they do?
eBay is the second largest online marketplace in the U.S. doing ~$$75 billion in gross merchandise value (GMV) with 134/19mm active buyers/sellers
Why we like them?
It has a thrifting/circular economy; potential trade-down winner (e.g. auto parts, fashion, refurbished goods)
Market leader benefiting from network effects in niche categories, now 1/3 of total GMV growing > than non-focus categories; think these types of consumers can be less eco sensitive
Leveraging AI to drive new users, ease of use for sellers, ultimately unlock more TAM
Ads now ~20% of total rev, growing well above marketplace business (high-teens/low-20s)
| Disclosure: | Personal | Family | Portfolio/Fund |
|---|---|---|---|
| CACI NYSE | N | N | Y |
| IDCC NASD | N | N | Y |
| EBAY NASD | N | N | Y |
PAST PICKS: DECEMBER 30, 2024
Meta Platforms (META NDAQ)
Then: US$591.24
Now: US$662.81
Return: 12%
Total Return: 12%
Argan (AGX NYSE)
Then: US$138.92
Now: US$315.00
Return: 127%
Total Return: 128%
Interactive Brokers (IBKR NDAQ)
4-for-1 forward stock split on June 18, 2025
Then: US$178.95
Now: US$64.89
Return: 45%
Total Return: 46%
Total Return Average: 62%
| Disclosure: | Personal | Family | Portfolio/Fund |
|---|---|---|---|
| META NDAQ | N | N | Y |
| AGX NYSE | N | N | N |
| IBKR NDAQ | N | N | Y |
