Canada is on the cusp of what could be a generational investment opportunity. After years of underinvestment, billions of dollars are flowing toward infrastructure, defence, energy and data centres—and some of the biggest beneficiaries may still be overlooked by investors. Andrey Omelchak, President, CEO & CIO at LionGuard Capital, believes Canada’s economic transformation is just getting started. After outperforming both the TSX and Nasdaq without relying on big tech or mining stocks, he explains why he’s so bullish on Canada’s future, where he’s finding opportunities and which companies could deliver outsized returns.
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FROM AMBER’S DESK
Child 1 lost her tooth this week. She’s almost nine so we took her lead on the whole tooth fairy thing. She seemed keen to go through the ritual of writing a note and hoping for money. Husband slipped it under her pillow while she slept but she awoke distraught – the tooth fairy forgot to write her a note!! After a few covert operations I “found” the note behind her bed hoping to put her ease. After reading it, she immediately turned around and said “See, I knew it was Dad’s handwriting!” Entrapped by our own daughter! It’s these kinds of mind games make me think: this kid’s going places.
Here are five things to know today
1.
Dip buyers step into stocks, bond yields rising
Yesterday’s session was painful for tech stocks but ultimately ended on a slightly higher note after soothing words from Nvidia’s Jensen Huang about the latest AI anxiety point: CoreWeave. More on that below. The comments led to a rally in tech that saw CoreWeave actually finish up on the day. The market also was digesting some thoughts from Fed Chair Kevin Warsh who really didn’t say anything about monetary policy, but seemed upbeat about the US economy and not sour on inflation so the market pared back pricing of a rate hike at the end of the month to just 15% odds.
The TSX managed to outperform thanks to a recovery in gold stocks and tech stocks. Everything was in the green except energy. We get a material pickup in earnings south of the border next week with 76 S&P 500 companies reporting including tech heavyweights IBM, Netflix, Tesla and Meta.
2.
Activist investor steps up to block H&R REIT deal
Another top investor says they will vote to block the deal to break up H&R REIT because the “value falls short on key metrics.” Sandpiper Group, which owns 1% of H&R REIT and is backed by the founder and former CEO of Amica Mature Lifestyles, says better alternatives are on the table.
As a refresher, the embattled H&R REIT was pushed to pursue a sale by activist investors. Because H&R has many different assets, a single bidder did not emerge. Instead, H&R reached a deal to sell its industrial business to private equity including Blackstone, its residential assets to GO REIT, and the remainder to its current CEO Tom Hofstedter. The deal was immediately unpopular with both H&R and GO REIT selling off on the news.
“At C$10.15, the consideration is below: (i) H&R’s reported NAV of C$16.23 per unit at June 30, 2026; (ii) the C$10.80 to C$13.20 fair market value range set by National Bank Financial, the independent valuator engaged by H&R’s Independent Trustees; (iii) C$10.49, the unaffected June 10, 2026 price against which the board measures its 14.5% premium; and (iv) C$10.89, the price at which H&R units traded the day before the Transaction was announced,” states the release from Sandpiper. They also call into question the purchase of assets by Hofstedter and the reward of stock options at higher prices than unit holders will get.
We’ve spoken to many shareholders including Jeff Olin of Vision Capital, Cole Smead of Smead Capital and JF Tardif of Timelo Investments, who all panned the deal. Recently, RBC Asset Management said they would vote against the deal. Still none were willing to mount a campaign to actively stop the deal beyond just voting against it. Sandpiper means business as they’ve hired the activist duo of Wes Hall of Kingsdale and Walied Soliman of Norton Rose Fulbright – two people who don’t like to lose and rarely do.
3.
Tesla pops 3.4% after literal flying car debut
The videos may lead you to believe it is AI – but rest assured it is real life. Tesla unveiled a new roadster sports car that can go from 0 to 60 miles per hour in 1 second and that can also hover using thrusters made in collaboration with SpaceX. It sounds like something out of the future but it is happening now. I certainly could have used something like this while sitting in rage-inducing Toronto traffic yesterday. While it is very cool, it is mostly a marketing exercise.
“The Roadster will not move the volume or revenue needle, with production likely limited, and investors should not model it as a growth driver,” wrote Dan Ives of Yorkville Ives, “What it does is restore the brand halo at the top of the market and put a spotlight on the engineering stack a week before (earnings) on October 21st.” More importantly, says Ives, this could be a bigger signal about the future of Tesla and SpaceX as one company.
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“We believe there is an 80% chance that Tesla and SpaceX merge by the end of 2027 for a number of strategic AI/data driven reasons.” — dan ives, yorkville ives (outperform, $500 target) |
4.
CoreWeave drops 5.6% in pre-market
The embattled neocloud provider rallied yesterday after Nvidia’s Jensen Huang said the strength of CoreWeave is growing every day. CoreWeave is a key customer of Nvidia’s – it buys Nvidia chips and rents them out to others looking for compute. Nvidia is also a key financier of CoreWeave’s chip purchase. Having said that, it was enough to stem the bleeding yesterday but today the wound has opened back up.
CoreWeave bonds have been a particular pain point and you’ll recall buying those bonds was a top idea from Brian Carney of Mawer Investments when he was on the podcast. He’s not backing down, he tells me he is sticking with his call. “There has been no company-specific news behind the moves,” said Carney in an email to me. “The signals coming out of the business between Q2 and now have been consistently strong heading into earnings. Credit fundamentals are strengthening while the bonds have sold off. In our view this is an opportunity.”
5.
Financials face tough crowd as earnings continue
Citizens Financial, Regions Financial and Truist are all down in the pre-market despite beating profit expectations. It is a continuation of the apathy investors have had toward the sector.
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