Caution isn’t stopping Gordon Reid from finding opportunities. The President & Chief Investment Officer of Goodreid Investment Counsel Corp. is getting more defensive as markets contend with higher interest rates, inflation and geopolitical uncertainty—but he’s not taking his chips off the table.
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Scorecard: last year’s picks (July 15, 2025)
Last year Gordon pounded the table on financials — all three worked, and he trimmed the two biggest about six to eight weeks ago, right before the group rolled over. He’s holding, but wouldn’t add here (a new client, he notes, still buys them — just at today’s smaller weight).
Goldman Sachs (GS): +40%
Cut back not because he soured on it, but because it had grown too big a slice of the book. As he puts it, trimming is like buying fire insurance — pure defense, not a bet the stock falls.
Morgan Stanley (MS): +45%
Same logic, same timing — shaved down before the recent pullback in the group. Still a core holding, just right-sized.
Jackson Financial (JXN): +60%
The biggest winner of the three, and still in the portfolio.
Top 3 Ideas: AI’s “picks and shovels,” on sale
A theme this time, and it’s a pivot from last year’s financials: the infrastructure behind the AI build-out. All three are second-derivative AI plays that have sold off hard as investors fret about a spending slowdown — which is exactly why Gordon likes the entry point.
1. Ciena (CIEN) — the optical networking pick
Down ~40% from its 2026 peak, along with the rest of the AI trade.
- What it does. Optical networking — moving data as pulsating light rather than over copper (Ethernet), which is faster, cleaner, and less prone to interference inside a busy data center. It’s taking real share in the data-center build-out.
- Why it sold off. Fears that AI spending slows. But after years of near-zero growth, it’s now compounding revenue at 20–30%.
- The financial hook. Very high operating leverage — each incremental dollar of revenue drops more to profit on a fixed cost base.
- Gordon’s discipline. He’s trimmed it four or five times on the way up to stay in control and avoid a round trip back to the lows.
2. EMCOR Group (EME) — the build-out contractor
Booming, profitable, and still only ~20x earnings.
- What it does. Electrical and mechanical building services — heating, venting, piping, lighting and communications for facilities, data centers among them.
- The demand signal. Book-to-bill around 1.3 — it’s winning roughly 30% more orders than it’s fulfilling, so the backlog keeps growing.
- The valuation. Despite the boom, it trades around 20x earnings — reasonable for the growth.
3. MasTec (MTZ) — the wider infrastructure play
The broadest of the three — the shovels for getting facilities built.
- What it does. Infrastructure services with a wider focus than EMCOR — managing the build-out itself across large projects.
- The thesis. A classic second-derivative AI bet: it doesn’t matter which hyperscaler wins, the build-out flows through the services contractors.
- The risk he’ll name himself. AI capex could slow — political pushback on data centers, a soft patch after the midterms. But “slowing doesn’t mean cessation,” and Gordon argues these projects inevitably get built somewhere that will have them.
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