Darren Sissons, Partner & Portfolio Manager, Campbell, Lee & Ross Investment Management
Focus: Global & Technology Stocks
Top Picks: Atlas Copco AB, Brookfield Corp, Crombie REIT
MARKET OUTLOOK:
Looking forward, two thorny catalysts are quietly unfolding that will drive both positive and negative market impacts.
The first is the U.S. midterm elections. Current polling suggests the U.S. President will become a lame duck during his remaining two years in office. Given his unconventional style, expect more executive orders and heightened volatility.
The second is building inflationary pressure. The Bank of Canada raised interest rates by 0.25 on October 28, 2026, with further increases likely. Equally concerning is the 79 per cent probability of a 0.25 per cent increase in U.S. interest rates following the December U.S. Federal Reserve meeting.
Rising Canadian interest rates will positively impact the Canadian dollar, reducing imported inflation and making foreign travel cheaper. Unfortunately, higher rates increase debt-servicing costs, reducing demand for new loans from corporates and consumers. Collectively, rising rates will slow the economy at a critical time when U.S. tariffs are already biting.
The counterbalance is the discounted entry levels available in rate-sensitive sectors, i.e., pipelines, real estate investment trusts (REITs), telecommunications, and utilities. Elevated yields combined with attractive entry levels, particularly among companies with intact growth catalysts, are a positive. Additionally, heightened volatility will provide opportunities to add inexpensive exposure to quality names and enable profit-taking on overbought securities.
A brief word of caution on tax-loss selling. Given the strong markets under Trump 2.0, risk-managed portfolio trimming and repositioning throughout 2026 generated sizable tax liabilities. Be mindful of companies currently being sold for tax-loss purposes, as the transition into the new tax year may see investor sentiment reverse from selling to buying.
- How to set BNN Bloomberg as your preferred source on Google
- Market-moving news, fast: Get the BNN Bloomberg App now
- Sign up for the Market Call Top Picks newsletter at bnnbloomberg.ca/newsletters
TOP PICKS:
Atlas Copco AB (ATCO B SS)
A progressive dividend currently yielding 1.85 per cent. It is the leading global vacuum franchise, with exposure to four segments: compressor technique (47 per cent of revenue), vacuum technique (23 per cent), industrial technique (17 per cent), and power technique (13 per cent).
Vacuum technology is a major beneficiary of semiconductor production, as the clean rooms use vacuum technology during semiconductor fabrication.
It operates an asset-light business model, focusing primarily on value-added activities such as design, procurement, research and development, and marketing, while outsourcing lower-value-added functions.
The company’s tuck-in acquisition program acquires numerous companies annually, both to enter new markets and geographies and to expand product offerings.
We are long-term owners, which has generated a multiple on our cost base.
It sold off somewhat in 2026 so is attractively priced, despite generating a 10-year annualized total return in Canadian dollars of 17 per cent per annum.
Brookfield Corp (BN TSX)
An irregular dividend currently yielding 0.73 per cent. It is a leading global private capital franchise with exposure to real estate, infrastructure, private equity, and liquid strategies.
Corporate cash flows are best understood through the lens of distributable earnings (DE), which encompass operating results, gains on divestitures, and profit-sharing on invested funds. DE, which has typically grown at a low-teens annual rate, is a key driver of total assets and shareholder equity growth, which compounded at annual averages growth rates of 16 per cent and 15 per cent, respectively, over the past 15 years.
Brookfield is attractively priced. Like its peers, concerns over private debt exposure, have weighed on its shares driving a 19 per cent discount vis-à-vis 12 months ago. The discounting has created an attractive entry point for new investors.
Despite the 2026 sell-off, the company has still generated an annualized total return of 13.4 per cent since 2016.
Crombie REIT (CRR.UN TSX)
A sustainable dividend currently yielding 5.70 per cent. The lion’s share of the rent roll is supported by essential and investment-grade tenants, including Empire Company Limited banners (Sobeys, Safeway, FreshCo, and Farm Boy), which account for approximately half of annual rental income. The majority of the remaining rent residual is generated by Shoppers Drug Mart, Dollarama, Canadian chartered banks (CIBC, BMO, and Scotiabank), and federal and provincial government offices.
Crombie trades at an attractive entry level as, like its interest-rate-sensitive peers, its units have declined to a 15 per cent discount to Net Asset Value (NAV) due to concerns over rising interest rates.
For income investors, the sustainable yield and valuation discount provide optionality through both earnings’ growth and potential capital appreciation as the discount to NAV discount narrows.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| ATCO B SS | Y | Y | Y |
| BN TSX | Y | Y | Y |
| CRR.UN TSX | Y | Y | Y |
PAST PICKS: OCT. 7, 2025
Danaher (DHR NYSE)
Then: US$208.77
Now: US$235.10
Return: 13%
Total Return: 13%
LVMH Moët Hennessy (LVMH CAC)
Then: €560.00
Now: €383.15
Return: -32%
Total Return: -29%
Shell Plc (SHEL NYSE)
Then: US$74.91
Now: US$107.86
Return: 44%
Total Return: 48%
Total Return Average: 11%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| DHR NYSE | Y | Y | Y |
| LVMH CAC | N | N | N |
| SHEL NYSE | Y | Y | Y |
