Chris Blumas, Portfolio Manager, Raymond James Investment Counsel
Focus: North American Large Caps
Top Picks: Stantec, Brookfield Corp, Alcon
MARKET OUTLOOK:
There is no shortage of uncertainty in financial markets these days. The war in Iran has caused a spike in energy prices that has reverberated around the world and the build out of artificial intelligence (AI) infrastructure in the United States has increased the demand for commodities and power leading to higher inflation. Overall, U.S. inflation has remined above the Federal Reserve’s two per cent goal for more than five years and this gives the Fed less flexibility to ease interest rates.
Currently, around one-third of U.S. Treasury Securities are owned by foreign countries. Historically, the persistent U.S. trade deficit has helped to finance the increase in government debt. However, with greater onshoring and the repatriation of manufacturing capacity, there could be less demand for U.S. Treasury securities in the future.
Looking forward, higher inflation and lower demand for U.S. debt are significant catalysts that could continue to push U.S. interest rates higher and create headwinds for economic growth and financial markets.
While it’s important to understand the fears in the markets, it is also important to recognize the opportunities and position yourself to benefit from the powerful long-term impacts of compounding. While it is difficult to know how things will play out over the short term, history has proven that it pays to stay invested and remain mindful of company valuations.
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TOP PICKS:
Stantec (STN TSX)
Stantec is a leading global design and consulting firm headquartered in Edmonton, Alberta. The company provides a broad range of professional services, including engineering, architecture, environmental consulting, project management, and urban planning.
Stantec serves both public and private sector clients across infrastructure, water, transportation, buildings, energy, and environmental markets. The company is one of the largest engineering and design firms in North America and generates around 75 per cent of its revenues from this marketplace.
Over the years, Stantec has grown organically and through strategic acquisitions. This has allowed the company to expand its expertise and strengthen its regional footprint.
Over the last year, Stantec’s share price is down by more than 35 per cent as fears about artificial intelligence and service disintermediation have negatively impacted the industry. Going forward, artificial intelligence has the potential to make Stantec more efficient and improve project quality across its service portfolio.
The shares currently trading around 15 times forward earnings and have a trailing free cash flow yield of more than six per cent.
Brookfield Corp (BN TSX)
Brookfield is a direct investor and third-party asset management firm with a unique focus on real assets and private equity. The company has a controlling interest in each of its publicly traded affiliates and a portfolio of other private investments.
Brookfield is one of a handful of global private equity players that are uniquely positioned to raise large amounts of capital from institutional clients as they shift more of their portfolios towards private markets. While the company has four publicly listed operating subsidiaries (BAM, BBUC, BEP, and BIP), the parent company has the unique ability to allocate capital across its platform and operate in a counter cyclical manner.
Currently, Brookfield has around $200 billion in group liquidity available to deploy across its platform and is uniquely positioned to benefit from weakness in the global macroeconomic environment.
The shares currently trade around 14 times distributable earnings and have a core free cash flow yield of more than 6 percent.
Alcon (ALC NYSE)
Alcon Inc. is a Swiss American health care company that specializes in eye care products. While its global headquarters are in Geneva, Switzerland, its main operating base is in Fort Worth, Texas in the United States.
The company’s two main operating segments are its vision care and surgical businesses. Each of these businesses account for around half of Alcon’s revenues. The vision care business develops and markets contact lenses and eye drops while the surgical business develops and markets consumables, implants, and equipment.
So far this year, revenue growth in the U.S. has been hampered by tariffs. Despite these headwinds, operating fundamentals (profit margins, EPS growth, & free cash flow conversion) continue to improve and global demographics and trends in smartphone utilization are powerful trends that should continue to increase demand for Alcon’s products over the long-term.
The shares currently trade around 17 times forward earnings and have a trailing free cash flow yield of more than 5.5 per cent.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| STN TSX | N | N | Y |
| BN TSX | Y | Y | Y |
| ALC NYSE | N | N | Y |
PAST PICKS: OCT. 15, 2025
Constellation Software (CSU TSX)
Then: $3970.35
Now: $3131.06
Return: -21%
Total Return: -21%
Mainstreet Equity (MEQ TSX)
Then: $185.92
Now: $168.35
Return: -9%
Total Return: -9%
Honeywell (HON NASD)
Then: $202.50
Now: $211.01
Return: 6%
Total Return: 8%
Total Return Average: -7%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| CSU TSX | Y | Y | Y |
| MEQ TSX | Y | Y | Y |
| HON NASD | N | N | Y |
