Bryden Teich, Chief Investment Officer & Portfolio Manager, Avenue Investment Management
Focus: North American equities
Top Picks: Murphy USA, CP Rail, Topaz Energy
MARKET OUTLOOK:
The market is walking a tightrope between powerful positive forces and meaningful risks. On the positive side, governments are spending heavily and companies are investing in AI‑related infrastructure, which is supporting growth and corporate profits. On the negative side, the war in Iran, broader geopolitical tensions, and higher oil prices are creating uncertainty that can quickly affect sentiment.
After a weak first quarter, markets rebounded strongly in April, which we view as an encouraging sign for the rest of the year. The economy, however, remains split. Some businesses – especially those tied to artificial intelligence and digital infrastructure – are seeing strong demand, while others, particularly in consumer‑focused areas, are still under pressure.
Elevated gasoline prices and moderately higher interest rates are likely to weigh on consumers through the balance of 2026. By contrast, the Canadian market has started the year well, helped by strength in oil, gold, and the major banks. While the rapid shifts between market themes this year can be head scratching at times, we believe the new highs in U.S. indices deserve respect. In this environment, we continue to concentrate on high‑quality investments that fit our quality criteria.
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TOP PICKS:
Murphy USA (MUSA:NYSE)
Murphy USA is an Arkansas-based gas station and convenience store chain with over 1,600 locations throughout the U.S. This is an investment we have owned since 2022 and continue to like at current prices. We believe in the current high gasoline price environment this is going to lead to further market share gains for Murphy because they offer customers discount prices on their gas. They can do this while also maintaining strong margins on their gasoline sales. They continue to grow the store count modestly each year and are prolific at using excess cash flow to repurchase their shares.
CP Rail (CP:TSX)
The industrial economy remains strong in the United States, and this is leading to a tight freight market both in trucking and in rails. The U.S. rails posted strong earnings results in the past few weeks, while CP Rail’s results were okay. The trucking market is operating under tighter capacity which we think is highlighting the underlying strength in the industrial economy. This tightness in trucking pricing should also lead to continued tightness in rail pricing power over the next 12 months. CP trades at a premium valuation but we believe it is justified because of the high quality of the business. We have owned shares in CP Rail since 2020 and continue to like the opportunity in CP Rail today.
Topaz Energy (TPZ:TSX)
Topaz is a Calgary-based royalty and energy infrastructure business focused in Western Canada. They continue to grow production modestly and have a relationship with Tourmaline which has allowed them to build a strong portfolio of energy infrastructure assets. We have invested in Topaz since 2021 and we believe the company is a good investment for anyone looking for a stable dividend yield and modest growth over the long term.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MUSA:NYSE | Y | N | Y |
| CP:TSX | Y | N | Y |
| TPZ:TSX | Y | N | Y |
