Bruce Murray, CEO & CIO, Murray Wealth Group
Focus: North American and global equities
Top Picks: Alphabet, Airbus SE, Northwest Healthcare Properties REIT
MARKET OUTLOOK:
The U.S. and Israel’s conflict attack on Iran and the closing of the Strait of Hormuz to 20 per cent of the world’s hydrocarbon production has led to instability, pushing oil and gasoline prices higher which could rapidly become a major issue for consumers, particularly in the United States of America. These events have led to the stock market being increasingly volatile. Recent reports suggest Iran’s military capabilities are declining, which may allow Persian Gulf oil and gas exports to resume in the next few weeks and help markets recover.
In the longer term, the current wars in Ukraine, Iran and Africa are leading to global rearmament with the North Atlantic Treaty Organization (NATO) moving towards a five per cent gross domestic product (GDP) spend on defence.
While moderate inflation persists, tariff wars and rising commodity costs are maintaining upward pressure. The confusion caused by U.S. tariff policy is limiting capital spending, contributing to weak job growth as well pressures related to immigration which will also make it more expensive to hire workers in agriculture for example.
Despite these challenges, the massive infrastructure projects for artificial intelligence (AI) are expected to drive economic growth and allow the stock market to overwhelm the negatives discussed above.
We continue to see meaningful investment opportunities in AI, natural gas, defence, healthcare, and commodities. Our portfolio management will continue to balance risks and focus on opportunities.
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TOP PICKS:
Alphabet (GOOG NASD)
Alphabet is an internet powerhouse with the leading positions in search and many other apps including YouTube, Android and Google Cloud is emerging as a leading player in AI with its Gemini product. Gemini and Chat GPT are so far leap froging each other in product quality with each subsequent release.
We continue to favour the stock for long term investment.
Revenue growth for this behemoth is forecast to be $70 billion in 2026 or 17 per cent with mid teens growth expected for the rest of the decade. At current prices the stock is selling about 30 times its trailing earnings, but with earnings growth still expected to be mid teens though the rest of the decade there is lots of room for a higher stock price.
The market is very concerned over the capital investment required to fund the infrastructure both the power plants and required for AI and data centres themselves.
We, however, believe the big players dominating internet advertising like Alphabet and Meta are generating the cash flow to pay for AI as well as having the data that will be required for AI use and thus be market winners for some time.
Airbus SE (EADSY OTC)
Airbus stock has dropped some 20 per cent since mid-January as a result of market weakness and disruptions to the airline business such as wars, declining consumer confidence, higher oil prices and fuel supply disruption (Cuba now, maybe the Middle East and perhaps Asia).
We view this as a buying opportunity as we expect much of the above to change once the Iran war subsides. Airbus (and Boeing) has a multiyear backlog of passenger planes in its backlog with production still struggling to get production to pre-pandemic levels. Last year they delivered 793 commercial aircraft and still have a record backlog of 8,754.
Airbus also is a player in European defense with the Typhoon Eurofighter tactical transport, air to air refueling tankers, helicopters and a wide variety of drones.
We see Airbus with a long tail of 10 per cent plus revenue growth as the backlog is delivered and European defense spending picks up towards the five per cent GDP target. Airbus sells at about 22 times earnings per share (EPS) with revenue and eps growing 10 to 12 per cent for many years. We see this being a quality low risk investment with 20 to 30 per cent upside over the next 12-18 months as the market fears discussed earlier dissipate.
Northwest Healthcare Properties REIT (NWH-UN TSX)
Northwest Healthcare is the owner of facilities dedicated to healthcare from in town buildings focused on medical offices to full ownership of large hospitals. The company has a chequered history as under former management it funded with too much short-term debt which blew up on stock holders in the pandemic when interest rates rose rapidly. The company’s properties spanned too many geographies in North and South America, Europe and Australia.
New management was brought in when the stock collapsed, and the dividend was slashed by more than half. New management has put in place a very credible plan to refocus the business in North America and sell other properties when the opportunity arises to expand in chosen markets or reduce debt.
The current yield is 6.4 per cent paying three cents a month which is high for a quality property real estate investment trust (REIT).
We expect the market to gradually appreciate the turn around and the eventual opportunity to increase the payments and we could see the stock appreciate towards $8 per unit over the next two to three years.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| GOOG NASD | Y | Y | Y |
| EADSY OTC | Y | Y | Y |
| NWH-U TSX | Y | Y | Y |
PAST PICKS: APRIL 17, 2025
Meta (META NASD)
Then: US$501.48
Now: US$656.69
Return: 31%
Total Return: 31%
Eli Lilly (LLY NYSE)
Then: US$839.96
Now: US$995.65
Return: 19%
Total Return: 19%
Linamar (LNR TSX)
Then: $48.15
Now: $88.05
Return: 83%
Total Return: 85%
Total Return Average: 45%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| META NASD | Y | Y | Y |
| LLY NYSE | Y | Y | Y |
| LNR TSX | Y | Y | Y |
