Julien Nono-Womdim’s Top Picks for July 21, 2026

Market Call – July 21, 2026

Julien Nono-Womdim, Vice President, Equity Analysis, Goodreid Investment Council

Focus: U.S. equities

Top Picks: Regal Rexnord, Clean Harbors, Liquidia

MARKET OUTLOOK:

Volatility is the price of admission. The first half of 2026 has been an ongoing series of market-moving headlines, from the U.S.–Iran war and the subsequent oil shock, to the nomination of a new U.S. Fed chair and what that means for interest rates, to concerns about the future of artificial intelligence (AI) spending. There has been a lot to chew on. We may have seen the apex of these negative headlines, or we may not have.

Either way, markets have looked through the noise. The S&P 500 is up approximately nine per cent year-to-date, and the Russell 2000 is up approximately 18 per cent, small caps outpacing large caps by two-to-one, which already tells you something about where leadership is heading.

At Goodreid, we’re bottom-up investors. We focus on the short-, medium-, and long-term earnings trajectory of the businesses we own, relative to their valuation. And today, the opportunity set is favorable. There are indeed pockets of overvaluation, but there are also many businesses where we believe the earnings profile is underpriced by the market. We don’t expect semiconductor leadership to deteriorate materially in the near term. But under the surface, a rotation is already brewing. Eli Lilly has outperformed Nvidia over the last twelve months, and we’re seeing a similar dynamic across health care, financials, and industrials, another sign the market has been broader than most people assume.

To the extent recent volatility persists, we believe it will be positive for active managers who roll up their sleeves and understand the businesses they own.

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TOP PICKS:

Regal Rexnord (RRX NYSE)

A multi-year transformation starting to bear fruit. RRX has grown from a small tools company to a US$6 billion global leader in motion control, power transmission, and automation. Our thesis hinges on three factors.

First, the ongoing recovery in short-cycle industrials will serve as a catalyst. Second, it sits in two secular growth markets: humanoid robots, where it holds valuable intellectual property (IP) in actuators and power components, and data centers, where it supplies power management and cooling. Third, the company is paying down debt, which, combined with the above, should drive a re-rating of the shares.

At 17 times consensus forward earnings, we view the valuation as undemanding in absolute terms, relative to other quality industrials, and relative to its earnings acceleration potential.

Clean Harbors (CLH NYSE)

An underappreciated moat. Clean Harbors is a leading hazardous and industrial waste management company. Over the short to medium term, we view CLH as presenting a more compelling investment opportunity relative to its larger solid-waste and residential peers, for two reasons: U.S. reindustrialization should drive slightly better volume growth than residential peers, and its smaller size should allow for a longer runway of mergers and acquisitions (M&A) activity.

Due to environmental concerns, it is extremely difficult to get approval for new commercial incinerators or hazardous-waste landfills, which creates a structural pricing tailwind in an increasingly consolidated industry. At 32 times forward earnings, while the valuation seems demanding, the durability and scarcity of these assets justify the premium.

Liquidia (LQDA NASDAQ)

The biggest winners are built in stages. LQDA was added to our U.S. small-cap portfolio earlier in the year, and while the shares have done well, we believe there is material upside left, including the possibility of a takeout by a large pharmaceutical acquirer. LQDA recently launched Yutrepia, a treatment for pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD).

It competes head-to-head with United Therapeutics’ (UTHR) Tyvaso, and in our assessment its profile compares favorably on tolerability and dosing. We expect Yutrepia to keep taking share, and over time we believe it can command a majority of the PAH and PH-ILD market, with further optionality in other indications such as pulmonary fibrosis. The stock trades at 11 to 13 times our estimate of 2028 earnings.

This is not risk-free. LQDA is currently in patent litigation with UTHR, and while we believe the company is well-positioned, this is a thesis-defining risk.

PAST PICKS: FEB. 10, 2026

Citigroup (C NYSE)

Then: US$122.15

Now: US$132.29

Return: 8%

Total Return: 9%

Merck (MRK NYSE)

Then: US$117.15

Now: US$126.55

Return: 8%

Total Return: 9%

Celestica (CLS NYSE)

Then: US$297.93

Now: US$314.70

Return: 6%

Total Return: 6%

Total Return Average: 8%