Richard Fogler, managing director at Kingwest & Company, shares his outlook on North American Equities.

Richard Fogler, Managing Director, Kingwest & Company

Focus: North American equities

Top picks: Brookfield Corp., Secure Waste Infrastructure, Amrize

MARKET OUTLOOK:

Both the Canadian and U.S. stock markets are continuing to grow through the end of 2025, although at a potentially slower and more volatile pace than the previous year.

Economic growth should continue in the U.S. with double digit increases in corporate profits.

Analysts expect similar earnings growth for TSX companies albeit in a slower economy, mostly from energy and materials. The gold sector has accounted for around a third of the rise of the TSX so far this year. Will that continue? It’s a wild guess.

There is a good probability for lower interest rates and a more accommodative monetary policy from the Bank of Canada could help stimulate the economy.

The U.S. Federal Reserve’s future actions are a major point of focus, with potential for rate cuts to provide a boost, but also a risk of higher-than-expected inflation or a requirement to refund hundreds of billions of dollars collected on tariffs to dare that could keep rates elevated.

Investors should be mindful of lingering uncertainties, particularly surrounding global trade tensions and U.S. policy initiatives, which could inject volatility into the market. While the markets look to have a positive year, the S&P 500 may perform better due to Canada’s slower economic momentum.

Overall, while the bull market is expected to continue, it will likely be more volatile, and you should focus on fundamentally resilient companies.

TOP PICKS:

Richard Fogler’s Top Picks: Brookfield Corp, Secure Waste Infrastructure & Amrize Richard Fogler, managing director at Kingwest & Company, shares his top stock picks to watch in the market.

Brookfield Corp. (BN TSX)

Brookfield is a simple asset-heavy company relative to its share price. If you aggregate the holdings it owns in its subsidiary companies — Brookfield Asset Management, Brookfield Infrastructure Partners, Brookfield Renewable Partners, Brookfield Business Partners, and Brookfield Wealth Solutions — they alone aggregate almost US$109 billion. When you include the trophy office and shopping centre and residential real estate holdings of $20.9 billion assets you get a gross value of US$128 billion compared to the market capitalization of US$99 billion number that is 120 per cent above the current market price.

And the company expects to double AUM over the next five years driving a higher valuation.

Secure Waste Infrastructure (SES TSX)

Previously Secure Energy Services Inc., the company helps energy and industrial clients handle and dispose of waste streams, with environmental responsibility. Its operations are divided into two main segments. Waste management includes a network of over 80 facilities, landfills, and pipelines across Canada and the U.S., for the processing, disposal, and recycling of industrial waste and wastewater.

Secure collects and treats hazardous and non-hazardous waste to recover materials like oil and metal. Eighty per cent of cash flow is tied to highly stable sources, independent of oil prices, and 20 per cent of the cash flow is tied to drilling activity.

Energy infrastructure is a network of crude oil gathering pipelines, terminals, and storage facilities providing solutions for the transportation, optimization, and storage of crude oil. The stock trades at 12 times free cash flow. Waste companies trade at about twice that multiple.

Because the company has historically been considered part of the energy services sector it has been saddled with the lower capitalization rate. But the dominant and growing part of the business in waste suggests a valuation more akin to waste companies. In addition, the company’s unique niche generates a very high 21 per cent return on invested capital relative to low teens returns for waste companies and single digit returns for energy services. Better balance sheet. Predictable, recurring cash flow. High return on capital. And growth from acquisition makes this company very attractive.

Amrize (AMRZ NYSE)

Amrize was spun off from Holcim in June 2025. It has two operating divisions, materials and building envelope, each offering organic and acquisition opportunities. Amrize is the largest building solutions company with US$11.7 billion in revenues focused on the North American market. It has a network of over 1,000 sites, a highly efficient distribution system, and substantial aggregate reserves.

Growth was not a focus at Holcim but Amrize is well positioned to benefit from several powerful, long-term trends in North America:

Significant government spending on roads, bridges, and other public worksReshoring manufacturing will create demand for new industrial buildingsNew data centres are a major consumer of building materialsAmrize is expected to see long-term growth because of the ongoing demand for new housing

Amrize has had double-digit growth in both revenue and adjusted EBITDA in recent years. New 2025-2028 targets include revenue growth of 5-8 per cent and adjusted EBITDA growth of 8-11 per cent, including over $250 million in cumulative synergies, which is expected to lead to 0.5 per cent margin expansion per year.

The company maintains a strong balance sheet with an investment-grade credit rating. The CEO of Holcim Jan Jenisch has chosen to move to the new company. Very unusual. And he bought $100 million in stock for cash.

In addition, there is strong support. The founding family of Holcim retains a $2 billion interest in Amrize and Martin Ebner owns $1 billion of stock. Amrize has $1.15 billion in free cash, which is available for acquisition.

DISCLOSUREPERSONALFAMILYPORTFOLIO/FUNDBN TSXYYYSES TSXYYYAMRZ NYSEYYY

PAST PICKS: September 11, 2024

Richard Fogler’s Past Picks: Apollo Global, GFL Environmental & CI Financial Richard Fogler, managing director at Kingwest & Company, discusses his past stock picks and how they’re doing in the market today.

Apollo Global (APO NYSE)

Then: US$108.67

Now: US$132.06

Return: 21%

Total Return: 23%

GFL Environmental (GFL TSX)

Then: $55.31

Now: $66.89

Return: 21%

Total Return: 21%

CI Financial (CIX TSX)

Then: $17.54

Now: $31.99

Return: 82%

Total Return: 86%

Total Return Average: 43%

DISCLOSUREPERSONALFAMILYPORTFOLIO/FUNDAPO NYSEYYYGFL TSXYYYCIX TSXYYY