Bruce Campbell, President & Portfolio Manager, StoneCastle Investment Management
Focus: Canadian stocks
Top Picks: Condor Energies, Aecon, Groupe Dynamite
MARKET OUTLOOK:
Over the past month, we’ve shifted our portfolio from a neutral stance back to offense as our top-down indicators moved from mixed to broadly positive. That transition reflects improving conditions across both our intermediate-term and long-term signals.
What’s caught many investors off guard is the speed of the recovery since the March lows. But if you step back, this kind of sharp rebound isn’t unusual. We saw a similar move last April, and increasingly, markets are reacting faster to changes in liquidity, sentiment, and positioning.
One of the more important developments has been a breadth thrust in the NASDAQ. Historically, these signals are relatively rare, but when they occur, they’ve tended to lead to strong forward returns for technology over the following 12 months. That’s a constructive backdrop for growth-oriented sectors.
From a positioning standpoint, we’re taking a balanced approach. Our largest exposures are in technology, industrials, energy, and materials. While materials and precious metals have lagged recently and appear to be consolidating, we view that as a pause rather than a breakdown at this stage.
Overall, our outlook remains positive, driven by the strength in our indicators. That said, we remain disciplined. If those signals begin to deteriorate, we will adjust the portfolio accordingly.
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TOP PICKS:
Condor Energies (CDR TSX)
An energy company operating in Uzbekistan and Kazakhstan. There are two key drivers for the business, but the market seems to be focused on only one.
The first is production growth in Uzbekistan, which is expected to increase by roughly 60 per cent by the end of the year. That’s getting attention and is already reflected in the stock.
The second, and more overlooked opportunity, is in Kazakhstan. The company is developing an onshore liquefied natural gas (LNG) business, with its first facility expected to be in place by late 2026.
Once operational, that project should begin generating cash flow and could support the development of additional LNG facilities over time.
In our view, the market is underestimating the long-term value of that second opportunity.
Aecon (ARE TSX)
One of Canada’s largest construction and infrastructure companies.
The key story here is a multi-year turnaround led by management. They’ve been improving profitability by shifting away from fixed-price contracts, which historically created risk when costs moved against them.
That change is starting to show up in the numbers. The company recently reported record earnings.
More importantly, they now have a record backlog, at roughly twice their current annual revenue. That gives strong visibility into future work and supports continued earnings growth.
Groupe Dynamite (GRGD TSX)
A Canadian fashion retailer with a strong brand and above-average profitability.
The company operates more than 300 stores across Canada and the U.S., and a big part of the growth story is its expansion south of the border.
Management plans to open about 25 new U.S. stores in 2026, which should continue to drive revenue growth.
What stands out is profitability. The company is generating margins above 30 per cent, which is well ahead of most peers that tend to be closer to the 20 per cent range.
They are also returning capital to shareholders. That includes share buybacks and a recent special dividend, which reflects confidence in the business and strong cash flow generation.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| CDR TSX | N | N | Y |
| ARE TSX | N | N | Y |
| GRGD TSX | N | N | Y |
PAST PICKS: JULY 9, 2025
Kraken Robotics (PNG TSX)
Then: $3.41
Now: $7.71
Return: 126%
Total Return: 126%
Zedcor (ZDC TSX)
Then: $4.29
Now: $6.10
Return: 42%
Total Return: 42%
MDA Space (MDA TSX)
Then: $39.12
Now: $41.28
Return: 6%
Total Return: 6%
Total Return Average: 58%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| PNG TSX | N | N | Y |
| ZDC TSX | N | N | Y |
| MDA TSX | N | N | Y |
