David Driscoll’s Top Picks for Jan. 23, 2026

David Driscoll, President & CEO, CIO and Founder, Liberty International Investment Management Inc.

Focus: Global Equities

Top picks: Stantec, Littelfuse, Inc., Keyence Corporation

MARKET OUTLOOK:

While the last three years have been a focus of momentum investors in concentrated bets (AI, Chip manufacturers, commodities), it appears that investors are now diversifying, spreading their bets around to where there are other trends. Including those mentioned above, investors should also focus on financials (providing the financing for the tech sector), infrastructure (to help build what’s needed in the next sequence of the evolution of AI) and serial acquirers (companies that still make things but aren’t at risk of AI hurting their businesses.

At day’s end, this should help investors be fully diversified so if volatility increases or the markets correct in 2026 for whatever reason, the fall shouldn’t be as hard as the indexes, which exhibit heavy stock concentration based on favouring the high market-cap stocks.

Keep your bet sizes under control and diversify by industry, country and size of company and this structure should help investors limit their losses and stay in the game.

• Market-moving news, fast: Get the BNN Bloomberg App now
• Sign up for the Market Call Top Picks newsletter at bnnbloomberg.ca/subscribe

TOP PICKS:

STANTEC

Stantec is an engineering, architecture, and related professional services enterprise. It provides a broad range of consulting, project delivery, design build, and technology capabilities to private and public sector clients, across North America and internationally. One recent example is it has been named a preferred bidder to be a primary designer for the Scottish Water Enterprise, a multibillion-pound project to upgrade Scotland’s water and wastewater infrastructure.

The stock has come off a high of US$160 last October but has among the best metrics in the industry and trades at a 2028 price-to-earnings ratio expected multiple of 18 times, with annual dividend growth in the seven per cent to 10 per cent range, a low payout ratio of 23 per cent (a long runway of future dividend growth), the highest margins in the industry at 9.5 per cent and a return on invested capital (ROIC) that’s greater than its weighted-average cost of capital (WACC).

Littelfuse, Inc.

Littelfuse, Inc. makes and sells fuses and other circuit protection devices for use in the automotive, electronic and general industrial markets, along with sensors and LED lighting. It has a favorable long-term growth outlook, supported by solid organic momentum across core end markets and rising exposure to datacenters and infrastructure-related applications. Littelfuse’s datacenter business is gaining traction, with datacenter-related sales rising about 8 per cent in Q3. The firm said the sales were supported by expanding design wins and broader product participation across segments. It expects further scaling as the industry migrates toward higher-voltage architectures.

Littelfuse is a small-cap stock and exhibits similar metrics to its larger competitor, Amphenol. However, growth opportunities always favour the small-cap companies if they can execute as well or better. Littelfuse has less debt and generates much greater free cash flow, leaving it with room to make further acquisitions that should help its growth. On average, dividends have risen between seven per cent and 11 per cent annually.

Keyence Corporation

Keyence Corporation develops, makes and sells sensors and measuring instruments in the Factory Automation (FA) sector. Its products include code readers, laser markers, machine vision systems, measuring systems, microscopes, sensors, and static eliminators. As we move into year two of the FA upcycle, we see further room for strength, supported by resilient demand, ongoing innovation, and a favourable policy backdrop, setting the stage for new growth engines and continued market-share gains for sector leaders.

Its stock price high was 69,000 yen last January so this is a compelling price to buy. Dividend growth has averaged eight per cent to 15 per cent annually, the company has no debt, operating margins at 52 per cent and a ROIC that’s greater than it’s weighted-average cost of capital (WACC). It’s also a great diversifier away from U.S. technology and in a different currency.

PAST PICKS: MARCH 25, 2025

CHUBB (CB NYSE)

Then: US$291.40

Now: US$301.66

Return: 4%

Total Return: 5%

TC ENERGY (TRP TSX)

Then: $69.79

Now: $75.97

Return: 9%

Total Return: 14%

LAGERCRANTZ GROUP AB (LAGRB SS)

Then: 227.00 kr

Now: 195.70 kr

Return: -14%

Total Return: -13%

Total Return Average: 2%