Rebecca Teltscher’s Top Picks for May 19, 2026

Rebecca Teltscher, Portfolio Manager, Newhaven Asset Management

Focus: Canadian stocks

Top Picks: Premium Brands Holdings, Brookfield Infrastructure Partners, CAE

MARKET OUTLOOK:

It’s increasingly difficult to justify equity markets remaining at or near all-time highs given the range of risks that have emerged in 2026.

After a short bout of weakness in January and again in March, markets have erased all losses with no signs of slowing down.

In fact, the U.S. has achieved a record high close 18 times this year alone. The S&P 500 and S&P/TSX Composite Index continue to show resilience, but underlying conditions suggest growing fragility.

The rapid advancement of artificial intelligence (AI) has introduced structural uncertainty for traditional software businesses, initially compressing valuations and driving capital rotation into more tangible assets like infrastructure and commodities.

At the same time, escalating geopolitical tensions—including the ongoing Iran conflict—have disrupted energy markets, pushing oil prices higher and reintroducing inflationary pressure. Meanwhile, economic data tells a quieter but concerning story: employment reports are consistently revised downward, signaling a weaker labour market than headline numbers suggest.

And finally, the jump in oil prices has started to trickle through to general inflation putting central banks in a predicament for any future rate cuts. Taken together, these factors point to an environment where risks are accumulating beneath the surface, leaving the economy vulnerable and increasingly disconnected from elevated equity valuations.

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TOP PICKS:

Premium Brands Holdings (PBH TSX)

Premium Brands Holdings appears to represent an excellent buying opportunity at current levels, particularly given the disconnect between the company’s operational performance and recent share price weakness.

From our perspective, management continues to execute on the strategy it laid out over the past several years. The bulk of the company’s large-scale capital expansion program is now substantially complete, positioning Premium Brands at a meaningful inflection point for growth, especially within the U.S. market where recent investments in production capacity and distribution infrastructure are beginning to drive strong organic growth.

In addition, the company has recently announced divestitures of certain non-core businesses, a move that was well received by the market as it improves balance sheet flexibility and supports debt reduction efforts. More importantly, the long-term secular demand drivers behind the business remain firmly intact.

Consumers — particularly busy working families — continue to seek convenient, healthy, and high-protein meal options, an area where Premium Brands has built a strong portfolio of differentiated products and customer relationships.

With significant new capacity now available, improving free cash flow potential, and growing exposure to the much larger U.S. market, we believe the recent pullback in the shares does not accurately reflect the company’s long-term growth prospects.

Brookfield Infrastructure Partners (BIP.UN TSX)

Brookfield Infrastructure Partners remains an attractive long-term investment despite the recent pullback following the announcement of a potential consolidation of its multi-class structure. While the market has reacted negatively to the uncertainty surrounding the proposal, the company’s underlying business fundamentals remain strong and continue to grow.

Brookfield Infrastructure owns a globally diversified portfolio of essential infrastructure assets across utilities, transport, midstream, and data sectors that generate stable and predictable cash flows, much of which is supported by long-term, inflation-linked contracts.

This structure has historically allowed the company to perform well through various economic cycles and periods of market volatility. In addition, management has demonstrated a disciplined approach to capital allocation and growth, highlighted by a proven track record of increasing distributions for 17 consecutive years.

With ongoing organic growth initiatives, capital recycling opportunities, and increasing global demand for infrastructure assets, Brookfield Infrastructure appears well positioned to continue delivering attractive long-term returns for investors.

CAE (CAE TSX)

CAE Inc. appears to be an attractive long-term investment despite the recent weakness in the share price driven by concerns over rising fuel costs and the potential impact on airline demand. While near-term sentiment around the airline industry may remain volatile, we believe CAE’s business model is far more resilient than the market is currently giving it credit for.

The company benefits from strong secular trends in aviation training, including an ongoing global pilot shortage and mandatory recurrent training requirements that create recurring demand regardless of short-term fluctuations in passenger traffic. CAE itself has highlighted that pilot and crew certifications are required on an ongoing basis, making its civil aviation business inherently less cyclical.

In addition, long-term demand for aviation professionals remains substantial, with industry forecasts pointing to the need for hundreds of thousands of new pilots over the next decade. Beyond civil aviation, CAE’s defense division is also positioned for meaningful growth as governments across NATO and allied nations increase defense spending amid heightened geopolitical tensions.

The company has a large and growing defense backlog and management continues to project strong growth and margin expansion in that segment.

Taken together, these durable industry tailwinds and CAE’s leading global position in simulation and training support our view that the recent share price weakness represents a short-term concern rather than a deterioration in the company’s long-term outlook.

PAST PICKS:

Canadian Natural Resources (CNQ TSX)

Then: $43.15

Now: $67.32

Return: 56%

Total Return: 62%

K-Bro Linen (KBL TSX)

Then: $34.64

Now: $39.51

Return: 14%

Total Return: 18%

Pembina Pipelines (PPL TSX)

Then: $52.49

Now: $67.33

Return: 28%

Total Return: 34%

Total Return Average: 38%