Andrey Omelchak, CEO & CIO, LionGuard Capital Management,
Focus: North American small & mid Caps
Top picks: Bird Construction, Trisura Group, Electrovaya
MARKET OUTLOOK:
As we start 2026, uncertainty remains elevated across multiple dimensions, and we expect markets to continue grappling with macro, political, and structural crosscurrents. Geopolitics has moved decisively back to the forefront, with developments in Venezuela, increasingly forceful rhetoric surrounding Greenland and the strategic relevance of the Panama Canal, and the potential for renewed negotiations around the Canada-United Stated-Mexico Agreement (CUSMA).“Trump Corollary” to Monroe Doctrine is front and centre, as the U.S. is working to ensure its dominance of western hemisphere.
Beyond midterm election uncertainty and the prospect of a change in Federal Reserve leadership, the Department of Justice has now launched a criminal investigation into U.S. Federal Reserve chair Jerome Powell—an unprecedented escalation that markets must treat as a real variable in the 2026 policy backdrop. We are also observing clearer instances of government intervention across the economy: defence-related industries, the housing complex, and consumer finance (including proposals around limiting corporate ownership of single-family homes and a potential 10 per cent cap on credit card rates).
In parallel, U.S. equity market leadership has been heavily influenced by massive investments in AI infrastructure and compute capacity. Toward the end of 2025, cracks and skepticism emerged around the pace, efficiency, and ultimate return profile of these capital deployments. Whether AI-driven investment can continue to carry market performance in 2026 remains an open question. On the positive side, solid earnings-per-share growth rates and five per cent plus GDP growth might be in the cards for this year.
In Canada, we believe the “Build Canada” wave is very real and investable. After years of underinvestment and red tape, we finally expect accelerating activity in infrastructure, power grids, industrial capacity, and domestic resilience initiatives. At the same time, defence budgets are poised for large growth in Canada (and across many European countries), reflecting a structural repricing of national security priorities especially in the light of developments in Venezuela, firm position of U.S. government on Greenland and resulting impact on North Atlantic Treaty Organization (NATO) alliance.
Despite all this uncertainty, we view market prediction as futile. Importantly, we believe this is an excellent market for stock picking: short-term panics and periodic over-excitement in select areas of the market are creating real dispersion and violent stock price movements—and common sense, anchored in fundamentals of businesses, is often forgotten.
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TOP PICKS:
Bird Construction (BDT TSX)
A leading national construction and infrastructure services provider, delivering complex, long-duration work across industrial, infrastructure, and institutional end-markets. Management has repositioned the company over the past several years toward higher-quality, lower-risk projects, expanded self-perform capabilities, and increased exposure to durable infrastructure spending—creating a materially stronger and more resilient earnings profile than in prior cycles.
The single most important indicator is booming backlog levels. Exiting Q3/2025, Bird reported combined backlog of approximately $10.0 billion and subsequently announced around $1.2 billion of additional newly awarded projects. We view this as a clear signal that demand remains robust and in fact should accelerate.
Just as critical is backlog composition. Bird’s work today is increasingly tied to infrastructure, industrial, defense, power, healthcare, and recurring maintenance—typically longer-duration contracts with better margin characteristics.
Most importantly, we believe Bird is one of the most direct public-market beneficiaries of the “Build Canada” agenda. Federal and provincial priorities—power generation and transmission, transportation corridors, ports, defense infrastructure, healthcare facilities, and industrial capacity—map directly to Bird’s core capabilities.
Financially, the company is demonstrating operating improvements, with much more margins improvement and free cash flow generation on the horizon. Given positive unfolding dynamics, including higher quality business than in the past, we see strong potential for multiple expansion, which would be accretive to our base case upside.
Trisura Group (TSU TSX)
Offers a rare combination of attractive growth, high-return specialty lines, and significant balance-sheet flexibility at a valuation that we believe remains highly compelling. Trisura has built a differentiated North American specialty insurance platform spanning Surety, Warranty, Corporate Insurance, and U.S. Programs, with multiple avenues for profitable growth over time.
A key driver of our conviction is the company’s improving business mix. Surety, in particular, continues to stand out as a high-quality earnings contributor: while it represents a modest portion of overall premium volume, it generates a disproportionately meaningful share of underwriting income—reflecting strong unit economics and attractive risk-adjusted returns.
We also view the current setup in the U.S. Excess & Surplus (E&S) market as increasingly constructive. Recent stamping data across major states has shown improved premium growth momentum, which supports a stronger demand environment for TSU’s U.S. Programs business as we enter 2026.
Importantly, Trisura is operating from a position of strength financially. The company is carrying meaningful excess capital, which provides flexibility to support continued growth, absorb volatility, and selectively deploy capital into high-return opportunities as they arise. This is a strategic advantage in a market where many competitors are more constrained.
Finally, at current valuation levels, we believe Trisura is a very likely takeout candidate. Its specialty focus, scalable platform, and capital position make it an attractive strategic asset for larger insurance companies.
Electrovaya (ELVA TSX)
Largely undiscovered by both buy-side and sell-side investors, despite what we view as a clear operational and commercial inflection point, coupled with multi-year growth visibility. Electrovaya is a differentiated North American lithium-ion battery manufacturer with a defensible safety-and-longevity moat built around its proprietary ceramic separator technology. With a perfect safety record since inception, ELVA is well-positioned as a trusted solution in mission-critical applications such as 24/7 logistics, robotics, defense, airport ground support, data centers. Management guided to >30 per cent revenue growth in fiscal 2026 and explicitly highlighted that this outlook is conservative.
In the meantime, they are working on tripling their manufacturing capacity via Jamestown, N.Y., facility. This fully funded facility qualifies for U.S. 45 times tax credits, has access to abundant low-cost energy and highly skilled workforce.
On top of our base case including expansion in Jamestown, we believe Electrovaya is extremely well-positioned to become a supplier of choice for Stationary Energy Storage (SES) supporting data centers—particularly for short-duration, high-power backup needs where safety, reliability, and uptime are non-negotiable.
Management emphasized that most lithium-ion ESS solutions are built for commoditized 4-hour storage, whereas demand in backup power requires short bursts of high power—an area where Electrovaya’s technology is uniquely suited. We also believe that Stationary Energy Storage business is likely to command meaningfully stronger margins. Based on the last conference call, management stated that demand from just one U.S. state could require more production capacity than the forthcoming Jamestown mega factory facility can provide—highlighting transformative size of SES opportunity.
In the meantime, we are confident in ELVA filling Jamestown capacity from other demand drivers including fast-growing warehouse automation, airport ground support, and defense industries.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| BDT TSX | N | N | Y |
| TSU TSX | Y | N | Y |
| ELVA TSX | N | N | Y |
PAST PICKS: APRIL 1, 2025
Topicus.com (TOI CVE)
Then: $143.07
Now: $111.11
Return: -22%
Total Return: -22%
Boyd Group (BYD TSX)
Then: $205.63
Now: $224.28
Return: 9%
Total Return: 9%
Constellation Software (CSU TSX)
Then: $4603.16
Now: $2864.78
Return: -38%
Total Return: -38%
Total Return Average: -17%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| TOI CVE | N | N | Y |
| BYD TSX | N | N | N |
| CSU TSX | Y | Y | Y |
