The market isn’t just rotating—it’s being rewritten. In this episode of In the Money with Amber Kanwar, Paul Moroz, Portfolio Manager at Mawer Investment Management which has more than $65 billion in AUM, explains why we’ve entered an era of “change investing,” where the biggest opportunities—and risks—come from rapid shifts in technology, competitive advantage, and capital intensity.
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For a look at the week ahead read my column in the Globe and Mail.
Here are five things to know today
Back at it: Stocks are mixed and oil is up 3% after the US rejected Iran’s latest peace proposal. The deal would have removed all sanctions on Iran in exchange for re-opening the Strait of Hormuz, but didn’t contain any concessions on its nuclear program. The stock market has become numb to these developments focusing instead on the tech trade. The S&P 500 had its strongest six-week hot streak since the great financial crisis. Semiconductors have played a big part of that, now making 22% of the index and up strongly again today. Intel (+4%) and AMD (+3%) are on the leader board. Hantavirus is still low on the market’s list of concerns, but it is showing up in shares of Moderna (Barron’s calls it the market’s favourite Hantavirus stock). Passengers have been evacuated from a cruise-ship that has turned into a super spreader event for the respiratory illness, including a few en route to Canada. Moderna (+8%) said its working on an “early-stage” treatment last week. I own both Intel and Moderna.
Monday madness: Monday.com is surging 26% after reporting stronger than expected results and boosting its forecast. Monday.com has been a punching bag for investors dunking on software stocks that AI can replace. The stock is down 74% over the past year. The company is hoping this quarter will change that narrative. AI is disrupting the software business model because these companies used to charge per seat, but as AI takes up more work functions there are fewer seats. Many, including Monday.com, are shifting to charging by consumption. The more AI a company uses, the more Monday.com makes. Sales grew 24% this quarter and profit was significantly ahead of expectations. Its squeezing the shorts as well with nearly 15% of shares outstanding short. Is software fighting back? The sector is up 22% from the April low.
No place like homes: Beazer Homes USA is surging 35% after receiving an unsolicited takeover bid from its rival Dream Finder Homes. The offer of $25.75/share is a 40% premium to its May 5 close, which is when Dream Finders made the offer. In dueling press releases, Beazer revealed this is the third unsolicited offer made by Dream and its lower than the last two offers. Dream, meanwhile, says they’ve had no engagement from the board on their offer which as a top 10 shareholder of Beazer they find “concerning.” While I love the drama, I am also interested because homebuilders have been a difficult sector in a mostly dead housing market in the US. Perhaps this will put a floor on valuations.
All that glitters: Barrick Mining is popping 3% in pre-market after production was higher than expected and it announced a $3 billion buyback ahead of its North American IPO. The company also projected production growth for the remainder of this year. Prior to this quarter, production had been declining due to several operational setbacks. The buyback also came as a surprise. “(Barrick) had previously indicated that the higher dividend would be the main source of shareholder return, however this could be a response to the current below-peer group multiples,” wrote TD’s Steven Green.
Bits and bobs: Cameco could come under pressure after announcing a bridge collapsed, cutting off their ability to transport supplies to their key mines. As a result, Cameco is halting its Key Lake mill operations. Cameco is maintaining its production outlook for the year. Other uranium producers may rally on the news of a reduced supply and the expectation of higher prices (which Cameco would also benefit from in theory). Watch CAE after announcing it is mulling the sale of its software aviation unit. Flightscape, which offers cloud based tools for flight planning, is strong enough to be a standalone business, said CAE, and as such could be a way to unlock value. Shares of CAE have sold off along with airline stocks on higher fuel prices and are back to where they were when activist investor Browning West showed up in late 2024. CIBC is upgrading Dream Office REIT becoming one of only three analysts with a buy rating. “We have changed our perspective recognizing the following: 1) at current prices, D is trading at implied per sf values well below its own and other transaction prices giving investors a low entry basis (relative to recent Toronto transaction prices) and an adequate margin of safety; 2) occupancy is poised to rise materially through the end of 2026, especially in Toronto where committed occupancy is now nearing 90%; and 3) if the Toronto market continues to tighten, our forecasts are likely conservative, given the high operating leverage in the office REIT model and the high financial leverage on D’s balance sheet (which should continue to fall as NOI improves and D makes select dispositions).” Colour me tempted!!
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