Barry Schwartz, President & CIO, Baskin Wealth Management
Focus: North American Large Caps
Top Picks: TFI International, Fairfax, Topicus.com
MARKET OUTLOOK:
In a market where not much is working, it is tempting to sell your stocks that have done nothing and chase performance. This is the absolute wrong approach in our opinion. Now more than ever, investors should be diversifying their portfolios especially given a very concentrated market in artificial intelligence (AI) names in the U.S.
For AI, we favour they hyperscalers that we think will start showing tremendous free cash flow in 2028 and beyond.
We think there are lots of good opportunities in predictable and durable businesses that are perceived to be AI losers.
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TOP PICKS:
TFI International (TFII TSX)
- Trucking sector is currently volatile: sluggish economic activity outside of data centers, uncertainty from tariffs, but tight driver supply leading to higher trucking rates.
- Recent court ruling on broker liability will benefit large operators like TFI
- Generates strong free cash flows throughout the cycle due to their asset-light model… has been repurchasing stock in 2025, and likely doing so again with the dip
- Has M&A opportunities in all of their divisions, could still spin-off the truckload division in the future as well.
- Longer-term, will benefit from autonomous trucks.
- Trades at about 12x free cash flow… well under other LTL peers like ODFL.
Fairfax (FFH TSX)
- Stock has been weak due to worries about a soft market for insurance. Fairfax focuses on global, specialty lines which should be more resilient than North American P&C lines and will likely generate an underwriting profit this year.
- Will benefit from higher interest rates… has deliberately kept their fixed income portfolio short duration (under 4 years)
- Is active on investing: participated in Boots takeover with the Weston family, and acquired a stake in an Indian bank (IBDI)
- Stock is extremely cheap at 1.2 times book value and under nine times earnings.
Topicus.com (TOI TSX)
- Constellation Software affiliate focused on Europe.
- Is resilient to AI due to local regulations in Europe such as language requirements. Needs to be a local provider in many cases.
- Has had a relatively light year of acquisitions and some leadership change with CEO Robin van Poelje retiring.
- Stock has underperformed Constellation Software and is now trading at a cheaper multiple despite historically having faster organic growth.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| TFII TSX | Y | Y | Y |
| FFH TSX | Y | N | Y |
| TOI TSX | Y | N | Y |
PAST PICKS: FEB. 2, 2026
Microsoft (MSFT NASD)
Then: US$423.37
Now: US$530.92
Return: 25%
Total Return: 26%
MSCI (MSCI NYSE)
Then: US$624.75
Now: US$611.97
Return: -2%
Total Return: -1%
Netflix (NFLX NASD)
Then: US$82.76
Now: US$63.52
Return: -23%
Total Return: -23%
Total Return Average: 1%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MSFT NASD | Y | Y | Y |
| MSCI NYSE | Y | N | Y |
| NFLX NASD | Y | Y | Y |
