Mike Vinokur, Portfolio Manager and Senior Wealth Advisor, Propellus Wealth Partners – iA Private Wealth
Focus: North American all cap
Top picks: MTY Food Group, HPQ, Lincoln National Corp.
MARKET OUTLOOK:
After three very strong years in equity markets, we believe 2026 may bring meaningfully higher volatility than investors have become accustomed to.
We’re already seeing a broadening of leadership away from largely mega-cap tech stocks toward small and mid-cap companies. The Russell 2000 is already up more than seven per cent this year, and it hasn’t even been a month yet! While opportunities will certainly remain in technology and growth equities, we believe selectivity and discipline will matter more than ever. The coming year may once again reward true stock selection rather than passive investing.
Commodities are also awakening. Gold, silver, copper, and several other metals have begun to show significant strength, supported in part by a U.S. dollar that has been depreciating against many major currencies and lack of exploration and development.
Despite ongoing geopolitical risks, markets have remained resilient helped by strong corporate earnings, improving productivity in the U.S., and contained operating costs, all of which are supporting margins and valuation multiples. In addition, renewed buying of U.S. Treasuries by the world’s largest central bank has helped stabilize the bond market. Judging by the volatility or lack thereof in the move index one might conclude fears are overblown over U.S. government debt and deficits. Or perhaps we are witnessing the calm before the storm?
In the short term, we believe markets appear overbought and could experience a deeper correction over the next six to eight weeks. That said, we would not be surprised to see markets materially higher after an initial shakeout especially if there is some resolve on the geopolitical front as we foresee the One Big Beautiful Bill Act (OBBB) and lower interest rates injecting more strength into Q1 and Q2 GDP growth numbers.
Dips will be great buying opportunities, so have your buy lists ready.
- 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:
MTY Food Group (MTY TSX)
Has grown into one of North America’s largest multi-brand restaurant groups. Through acquisitions the group owns and operates under over 90 brands such as Mr. Sub, Yogen Fruz, Mucho Burrito. Most of the group’s revenues come from franchise royalties. With many companies mandating back to office policies, we believe that sales for QSR and fast casual will increase. The company has acquired many brands in the last few years and as a result has increased its debt load. We are not concerned given the amount of free cash flow company generates. In late 2025, the company initiated a strategic review process, which may result in either the whole company or part of it being sold. We believe the sum of the parts is much higher than the current trading price. In the meantime, the company just raised its dividend by 12 per cent. The shares now yield 3.5 per cent.
HP (HPQ NYSE)
A storied name in computers and peripherals trading at less than seven times earnings. Perhaps not a growth story, but definitely a very compelling FCF story. The margins they earn on selling hardware are sub six per cent while printing supplies are at 18 per cent. If they only increase margins by one per cent, this could impact the bottom line by over US$500 million per year and add US$0.25 per share in earnings. In the last 10 years, the company has repurchased almost half its shares and paid a steady dividend. We believe that the current dividend of US$1.20 is safe, yielding over six per cent. If history repeats, the company will not need any organic revenue growth in order to substantially increase earnings per share simply through returning capital to shareholders through repurchases. Analysts are concerned the windows refresh cycle may be over, impacting sales. We believe that at the current valuation much negative sentiment has been priced into the stock.
Lincoln National Corp (LNC NYSE)
A Lifeco that has operated for over 120 years. We believe the fears are overblown. The stock trades at approximately five times forward earnings, at seven per cent discount to tangible book value, sports a dividend yield of 4.5 per cent, and has a very strong balance sheet with a RBC of over 420 per cent allowing for shareholder returns through increased dividends and buybacks. The company is well managed, has reduced debt and we believe can earn US$10 per share, which provides a very compelling risk/reward opportunity at this time.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MTY TSX | Y | N | Y |
| HPQ NYSE | Y | N | Y |
| LNC NYSE | N | Y | Y |
PAST PICKS: MARCH 7, 2025
Corebridge Financial (CRBG NYSE)
Then: US$32.04
Now: US$30.02
Return: -6%
Total Return: -3%
Parkland Corp (PKI TSX) - *Acquired by Sunoco Nov. 5, 2025*
Then: $36.35
Now: $39.84
Return: 10%
Total Return: 12%
Secure Waste Infrastructure (SES TSX)
Then: $13.89
Now: $17.52
Return: 26%
Total Return: 29%
Total Return Average: 13%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| CRBG NYSE | N | Y | Y |
| PKI TSX | N | N | N |
| SES TSX | Y | N | Y |
