Ernest Wong, Head of Research, Baskin Wealth Management
Focus: North American Large Caps
Top Picks: Netflix, FirstService, Berkshire Hathaway
MARKET OUTLOOK:
- Difficult stock market to navigate this year due to record concentration in artificial intelligence (AI) and very poor market breadth.
- Seeing impact of higher interest rates in the U.S. on data centres and housing. Consumer has remained resilient however.
- In Canada, the economy is still sluggish from tariff uncertainty and lower immigration levels and higher interest rates will hurt.
- Finding good opportunities in non-AI and energy related stocks at attractive valuations.
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TOP PICKS:
Netflix (NFLX NASD)
- Stock down over 40 per cent over last year, facing disruption narrative amidst weak engagement in the U.S.
- Still believe in the business model: it is the largest streamer with most subscribers and profits, it can pivot to other types of content. Also gaining market share in international markets.
- Recently made management changes to improve content quality. Also has opportunities in sports and channels.
- Valuation extremely cheap at 15 times earnings, it will still grow double digits next year.
FirstService (FSV TSX)
- Has two divisions: Property Management division and Brands business that does home renovations, property restoration, commercial roofing.
- Historically has been a great compounder with a good track record of entering new markets, building up strong brands, and gaining market share over independents.
- Stock has been weak due to weak housing market and lack of storms. Results appear to have bottomed as of last quarter.
- Stock trading at about 21 times earnings and management is buying back stock.
Berkshire Hathaway (BRK.B NYSE)
- Has been concerns about Buffett’s retirement, but Greg Abel has been active with capital deployment: acquired Taylor Morrison and made a large Google investment.
- Will benefit from higher interest rates due to large cash position. Expect to have attractive investment opportunities as provider of liquidity.
- Stock trading at 1.5 times book value, has been repurchasing stock.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| NFLX NASD | Y | Y | Y |
| FSV TSX | Y | N | Y |
| BRK.B NYSE | Y | N | Y |
PAST PICKS: MAY 11, 2026
Stryker (SYK NYSE)
Then: US$282.58
Now: US$302.04
Return: 7%
Total Return: 8%
MSCI (MSCI NYSE)
Then: US$584.63
Now: US$605.16
Return: 4%
Total Return: 4%
Waste Connections (WCN TSX)
Then: $206.55
Now: $255.29
Return: 24%
Total Return: 24%
Total Return Average: 12%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| SYK NYSE | Y | N | Y |
| MSCI NYSE | Y | N | Y |
| WCN TSX | Y | N | Y |
