Gordon Reid, President & CEO, Goodreid Investment Counsel
Focus: U.S. Equities
Top Picks: Dycom, Verizon, WESCO International
MARKET OUTLOOK:
The market is quietly rotating, away from the drivers of the last couple of years, namely communication service and technology stocks to more defensive issues that have been under owned, particularly healthcare.
The result is serious stock action under the surface but on the face of things, large capitalization indexes are steady.
The rotation appears to us to be in the latter stages, based on technical indicators and valuation but, as we have witnessed over the past year, the macro landscape is changing.
A year ago, it was almost universally accepted that the next move in central bank interest rates would be in a downward direction. Now the opposite is true. Adding to the intrigue are the upcoming mid-term elections in the United States, which potentially could neuter the current U.S. administration.
For now, we are preaching and practising balance in our portfolios. Goodreid’s U.S. large cap portfolio is benefitting from an under weighted position in mega cap tech in favour of a more defensive posture, while the U.S. small cap portfolio, a big beneficiary over the past couple of years of outstanding results within artificial intelligence (AI) related industrial names, is taking a breather.
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TOP PICKS:
Dycom (DY NYSE)
Dycom is recognized as a second derivative AI stock, as it supports hyper-scalers in providing the latest connectivity across North America.
This issue has suffered recently along with the entire space, but we note that earnings are accelerating, and revisions are positive while valuations become increasingly more attractive.
Although financial progress tends to be lumpy because of weather disruptions and uneven capital allocations from the large telecom companies, we believe this issue will again be priced with a premium valuation.
Verizon (VZ NYSE)
Verizon has performed well under the more entrepreneurial direction of Dan Schulman, former CEO at PayPal.
Mobility and broadband divisions are growing well and under the new model cashflow is expanding because of a volume-based versus a subsidy-based approach.
At less than 10 times forward earnings and paying a 5.6 per cent dividend yield this defensive gem is a stock for the times.
WESCO International (WCC NYSE)
Wesco is a distributor of electrical, industrial, and communication products.
Once a staid industry, it is now a lynchpin in data center development, which account for about a quarter of its revenue.
All in all, at just over 20 times earnings and mid-teens annual percentage growth of earnings ahead, we are excited.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| DY NYSE | N | Y | Y |
| VZ NYSE | Y | N | Y |
| WCC NYSE | N | Y | Y |
PAST PICKS: SEPT. 17, 2025
Amgen (AMGN NASD)
Then: US$274.71
Now: US$394.08
Return: 43%
Total Return: 47%
Qualcomm (QCOM NASD)
Then: US$165.26
Now: US$176.25
Return: 7%
Total Return: 9%
United Rentals (URI NYSE)
Then: US$931.01
Now: US$1040.80
Return: 12%
Total Return: 13%
Total Return Average: 23%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| AMGN NASD | Y | N | Y |
| QCOM NASD | Y | N | Y |
| URI NYSE | N | Y | Y |
