Market Call: Bruce Campbell's outlook on Canadian Stocks (Sept. 25, 2026) transcript

[music] Thanks for joining us today on Market Call. I'm Mela Fernandez. Bruce Campbell with us on the show. He is president and portfolio manager [music] Stone Castle Investment Management. He'll take your questions on Canadian stocks. Here's how to reach us. Call us toll-free [music] 1855 3266266. You can also [music] send an email to market call atbn Bloomberg.ca. >> Bruce, good to see you. >> Yeah, thanks for having me on today. >> Let's talk about the markets a little bit and the kind of week it's been.

What have you been watching this week? >> I mean, there's so much right now to be watching. It's crazy. Interest rates are probably the top of mind for most investors. Something that we're watching. The the couple of things there is just the levels of those rates but also the second thing that we've been watching fairly closely is that uh 10year 2-year spread to see what's happening with it. You have seen it uh recently compressing.

So it uh is moving towards that zero which is something that we always want to be aware of because what does that mean for economic activity is that the market starting to uh think that economic activity could potentially be slowing into 2027. So we're watching that. Clearly oil prices, that's something that everyone's watching, which has a big impact on inflation. >> We've had a lot of back and forth on the political front for the Middle East conflict.

So prices have still stuck around $95 to $100. What's your take on where they will stay towards the end of the year? >> That's really anyone's guess, right? If um you know, if we were to see some type of resolution, I would think that the price goes down. Does it go back down to where it was previously? know because there has been a fair bit of um production that's been taken offline by damage that's been done that will take significant amounts of time to to come back on.

So I would think that just if if we saw peace tomorrow that we would still probably see something in the 70 to $80 range but without that you know declaration of peace and actually um compliance on that piece I think it stays you know above $80. >> Okay. So with that in mind, do you think if it stays around 8085, let's say, it'll still feed into inflation, or do you expect to see inflation cooling off and more tempered? >> Well, for every dollar that bar the barrel of oil moves up or down, it equates to around three basis points of inflation in the US.

So if we were to see it move down from here, you could see that starting to tick down. And obviously, if it moves up, it goes the other way. The the the other thing though is that we really want to be focused on is that heading into the first part of 2027, we're going to actually see higher numbers on the year the previous year's inflation rolling off. So, we should start to see inflation trickling down unless we see another dramatic move up in inflation from where it is right now. >> Are you factoring in midterms as well?

And if so, how? Well, the midterms um certainly have an impact, but it's interesting because the market is heading into what tends to be the best um time in the four-year cycle. Just just actually just before the midterm, so the end of October all the way through to to the next presidential election is the strongest period of time in the market cycle. And next year would actually be the strongest year of that entire cycle.

So, we're going through this weakness right now, which typically lasts kind of in the last half of September to kind of the first part of October where the market tends to be the most weak in a presidential cycle, especially around the midterms and then after that it starts to accelerate. >> Okay, so we will see what the next month looks like. We're going to take a break lining up phone calls for Bruce Campbell of Stone Castle Investment Management.

He's taking your question today on Canadian stocks. We're back in a moment. >> [music] >> Welcome back. We're going to start with an email from Alan. I'd like to hear the guest thoughts on MDA space. Is it a buy, sell, or hold to this point? Bruce, I've watched MDA space for a while. I feel like feel like it gets stuck at that $45 mark. it gains on announcements and and and sharing of backlog numbers and expansion and then it always kind of fizzles back down to around that mark.

What would you say is sort of leaving this company stranded there? That's a that's a tough one for sure. We've talked about this before when I've been on market call and we've talked about it with with with viewers as well. It does tend to be really volatile and certainly a lot more volatile than I would have expected given the tailwinds that they have behind them. We know that you know space is something that is going to be more and more adopted by more consumers not necessarily on a individual basis but on a corporate basis because the accessibility is getting cheaper every single time they launch a rocket in and satellite into space.

MDA has a lot of um a lot of positive news flow behind it, but it's also had some negative news flow and it seems like it's a bit of fits and starts where the market gets very excited about what the news is and those long-term tailwinds and then oh no, hold on, back to reality, you know, something's happened in the short term that takes that away. And it really has turned into this, you know, back and forth. It's been really really challenging because you would think that with those tailwinds it would have a more sustainable uptrend, but it hasn't.

It it almost is one that you need to have a core position if you believe in it and then trade around that core position. So, as those announcements come out and the excitement builds, you probably lose some stock that you hold and then as it starts to fade back, then you start to pick some up to to build your your core position back up. >> Okay? So, it's one you would have to more closely watch and and be sort of ready to sell on those announcements. >> I think unless you're prepared to just throw it in your account and lock it away for the next 10 years and forget about it.

If you're watching it quarter by quarter or day by day, even more so, then it's going to be very volatile and you need to be looking at trading it or just forget about it and and look at it again in 10 years. Okay, let's move on to Doug uh on the line in London, Ontario. Doug, go ahead. >> Yes, good afternoon. Uh Bruce, I was wondering about Chartwell Retirement Residencies. I uh stepped in a couple months ago and got some uh shares and since then it's been on a steady decline, sorry.

So, I was wondering what your thoughts are and if maybe I should be purchasing more at this uh point. Thank you. Bye. >> Okay. Thank you for the question. chart uh well has been on a fairly steady decline since the end of the summer. It's a company you think would be a little more steady but clearly not. Any reason for that? >> Well, I think there's two opposing forces happening here right now. The first is if you look at the long-term demographic trends and what you're seeing from from um the uh retirement residences and and the lack of supply for those, that's the long term. the short term and why Doug, it's probably pulled back from when you originally bought it was that we've seen this pressure on on REITs.

We've seen this pressure on anything that's interest sensitive because of the fact that rates have been rising here and they have debt that is impacted by those rising rates. It becomes more difficult to service that debt because they're now paying higher rates. I would suspect that that's part of the reason that we've seen it pull back here of late. So, it's really those kind of two opposing forces. To answer your question about, you know, should you be buying more or adding to your position right now, that would really come down to what we're seeing with rates.

And if we start to see that that inflation is moderating and it's not continuing that accelerated pace upwards at that point in time you will start to see some um some moderation in rates and and perhaps they start to pull back and you will see the REITs in general and and something like chart will start to move back up again. >> Okay. So it goes uh the way REITs go. Let's go to our next caller on the line. Rob is in Calgary.

Rob, go ahead. >> Hi, thanks for taking my call. I mean u shareholder in alquin power and although I like the dividend the share price is going in the wrong direction. Does spruce see a catalyst to turn this company around or is it time to cut my losses and move on to one of his preferred picks in the utility space. Thanks again and have a good weekend. >> Okay, thank you for the question. It does have that 5% plus dividend which clearly uh Rob was saying he likes.

Um but is there anything sort of weighing down Algangquin Powers and another player in the space that you do like? Well, when we look at algunquin power, it would fall into the same category as what we just talked about with Chartwell in that if you look at the the chart when it started to really um pull back was was in a more dramatic fashion was really kind of in the mid August time frame and it it peaked out you know earlier this year but then has pulled back and that again has to do with the debt level that they have servicing that debt and higher interest rates for utility.

It has been probably more volatile than most people would have expected. I think that has to do with a a couple of different things. One is the projects that they've had and haven't had and then also they um the fact that they're they're they are interest rate sensitive. The dividend has been nice and again it depends on your time frame. So if you're worried about the capital certainly it's going to jump around and you might need to be managing that.

But if you're looking at it just purely from an income standpoint, then the income's there. As far as other uh utility names right now, we we aren't holding any utility names. When we started to see rates on their move up, we actually made sure that we had nothing in our portfolio. Uh that was really interest rate sensitive with the exception of a little bit of financials and that's really it. Were are utilities generally uh more susceptible to to the rates or did you have to go through sort of one by one and the companies that were? >> Well, generally they they they flow and and trade as a groups.

So, you know, typically investors look at those higher interest rates and then are concerned and then start to pull back their exposure to that sector. And that's exactly what you've seen if you look at the Canadian utilities, if you look at the US utility sectors, both of those sectors really started to come off when we started to see rates move up in in the beginning when they first started to move up in the beginning of June. >> Okay, let's take a quick break.

We're going to get to more of your phone calls and emails for Bruce Campbell when we come back. Stay tuned. >> Welcome back. Mike's been holding on the line in Toronto with a question for Bruce. Mike, go ahead. >> Hi, I'd like to ask about Condor Energies. I picked some up and did well on your recommendation. It's kind of stalled out a little bit now. Do you think it's a good time to maybe take a little bit of profits and re-enter if the oil prices drop a bit? >> Okay.

Thank you for the question. This is uh oil and gas. Do you remember what you liked about it, Bruce, when you recommended it? >> Yeah, there's there's a lot to like about it. It's really you really interesting. So they're they have natural gas project and and and oil project in Usbekistsan and then they have an LG project which they're just just about at the finish line uh in Kazakhstan. And we know what's happened with diesel and the talk about diesel prices.

It's even worse over there. And there's a real diesel shortage. And so what Condor has been doing is they're working on onshore LNG uh facilities. They have a they have a a a natural gas supply that they're going to turn into LNG and then that'll allow locomotives um some of the big mining trucks and then also transport trucks to start converting over to using LG as opposed to diesel. This is going to be a early 2027 item that happens for them where they'll have the facilities up and running.

They've also had amazing success from the drill bit in their Usbekiststan um drilling. So there's really those two catalysts. And then the third thing that I think is a little bit further out in the horizon is they have some lithium assets which I wouldn't really focus on too much now. I think it's more to do with what happens with the LG and as they as they bring that facility the first facility on board and producing LG getting that out into the market and then they'll take that cash flow and continue to build up um more facilities.

So, it had a it had a fairly significant run on a couple of different things. One was as they got closer to getting that LG project on board. And then the second thing is they've had some really great success with the drill bit that has uh exceeded the market's expectation. As a result of both of those, the stocks really run up. Anytime that happens, you tend to see a little bit of consolidation just as um as people take profits.

We we we own it and we continue to hold it and we we like it here and think that uh it goes higher over time. >> Okay. So, uh that is a suggestion of a hold for Mike. Let's go to Glenn in Oakville, Ontario with a question. Glenn, go ahead. >> Well, hi Mela and Bruce. Thanks for taking my call. I'm calling today about Openext. Um I have a 25 stock portfolio diversified with equal waiting. Open text is underwater right now.

I'm wondering if I should add more or or hold and I'd also like to know Bruce if you uh own open text. Thank you and I'll listen to your answer. >> Okay, thank you for the question. Company out of Waterlue, Ontario dragged down by concerns about AI but they also had a change of leadership. So there's a lot going on here, Bruce. >> There's uh there's been a fair bit going on there for sure. not only the change of leadership, they've just recently done um a refinancing of some debt at at a little bit lower rate and then they've also been, you know, changing their business to some degree to to have more of an AI focus as, you know, as the world continues to go that way.

If you look at, you know, the stock chart, it's not hard to figure out what's going on. They're in that software space and they've been hurt by the potential of AI. If you look at their numbers, they haven't really been impacted that much. If you then, you know, sort of um zoom out a little bit and look at what we're seeing with the general software sector, there's more there's more of thought that software isn't going to be as affected by AI that originally was thought say at the beginning of this year.

And we started to see that the software stocks recover. Openex isn't one that we own right now. If you remember how we look at the universe, we rank the universe and we're looking for that earnings acceleration. They don't have that right now. Now the earnings are are more or less flat. So on a comparison by comparison basis, they've just been flat. We would want to see that acceleration coming. When that happens, the stock's probably already up 20% from where it is.

But that's what we like. If you're if you're looking for bottoms and you want to try to, you know, time the bottom, then it's probably something that you want to look at now because we have started to see other companies in the space uh moving up and at the same time they've had some catalysts with new management and and debt refinancing. >> All right, let's move on to the next caller then. Uh we have John on the line in Winnipeg.

John, go ahead. >> Yes. Hello. Uh hi Marilyn and Bruce. My question be about cure leaf and the um fact that you used to follow the some of the cannabis stocks and I'm curious whether the uh uh Aurora takeover makes sense to you or would you prefer someone uh one of the other companies involved in the states at the moment? Thanks. >> Okay, thank you for the question. What did you think of that offer? Well, first off, Cur Leaf, they're the biggest in in in the US, and so they're the ones that that's really kind of driving the bus, but also it's really interesting because they have this Canadian listing, and they're getting included in some more uh indexes as far as the offer for Aurora.

It certainly wouldn't have been something that I personally would have looked at, but they've they would have done way more due diligence than what we have. So, I think that they're trying to be a little bit predatory and that they're coming in and and trying to pick off Aurora when it's, you know, doesn't seem to have lots of uh tailwinds behind it. As far as the sector goes, it's really interesting because there hasn't been a lot of political news and typically that's what really drives the sector, but it's slowly been starting to creep up here.

And I think a little bit of that has to do with the fact that now with some of these cannabis companies both in Canada and the US, they're starting to be included in some indexes, which means that institutional um ownership can happen really for the first time since this sector's emerged because there hasn't really been that opportunity in the past. And then the lottery ticket opportunity here is at what point in time do they change either the banking laws or uh or the legalization of it from a US standpoint to where it becomes legal across you know all the states either medically or recreationally or both that at that point in time there's going to be this huge catalyst but we still need to look after that 280 which is the the tax legislation that doesn't allow them to write off business expenses.

If they change that, then all of a sudden these companies all change from a fairly significant standpoint of profitability, >> which was suggested, right? >> It's um you know, it's always kind of tabled and in the works, but we haven't really seen it transpire yet to where it's affecting numbers. >> All right. Okay. Let's take a quick break. We're going to come back and have a look at Bruce's past picks. That's coming up next. >> [music] >> Welcome back.

Let's go through some past picks from Bruce from March 9th of this year. At the time you chose uh Cavy Energy, so CVVY on the TSX. This is a natural gas play. So 114 at the time, 231 today. So 103% upside. same for total return. Uh tell us a little bit more about Cavy. >> Cavi is really interesting because they have something that not a lot of other natural gas companies have been able to do, which is they're producing sulfur and with everything that's happened in the Middle East.

Sulfur is something that's not being moved the way it used to be. So sulfur pricing has been increasing just as it just at the time when they've really been ramping up their production of sulfur. So that's one aspect and then the second is that they've seen been seeing production increases which has helped their cash flow which is they've been allowed to pay down some of their debt which is um you know obviously something that investors always like to see and then with um some of the pricing they're looking at bringing some production that they've had offline potentially back online and I think investors are looking that as well.

So you really had those those three catalysts which have has taken the stock price higher. >> Okay. Do you expect more catalyst down the road? Is it something you're holding on to? >> It is something that we continue to hold. I think that there's going to continue to be uh increase from from the sulfur. And then the second thing is that uh I think you could see some upside from the drilling and this production that could come back on stream and then they just continue to pay down debt which markets always like when that's happening.

All right, let's get to your next pass pick. NEO Performance Material. So, just NEO on the TSX. Uh again, this is from March 9th, 2460 at the time to 3268 today. 32% upside, 32% uh total return. Uh this company does rare earth production. Is it one of the few in the space for Canada? I don't often talk about rare earth companies. >> It is. It's one of the few in Canada, but it's also one of the few outside of um China.

There's a lot of rare earth production that's done in China. In the recent summit with um with China and the US, that was one of the discussion points that most people thought they would be talking about was what was going to happen with rare earth production. And Neomaterials has facilities that allow them to do that processing and also help with um magnetic production as well, which we know is something in demand um in a lot of different technology uses.

So, it's um you know, it's it it had this big run up. It pulled back a bit um lately and it looks like it's just starting to reacelerate again here. >> All right, let's get to your third past pick, which was Kraken Robotics, PNG, on the TSX. Uh in March, uh it was 917. and it's gone down to 451 today. 46% drop return. Uh 46% total return. Uh another company that I've kind of watched, it's on the defense side of things.

Uh thought it would benefit from what's been going on in the Arctic. It does sort of mine clearing and underwater surveillance, that kind of thing. What has been weighing it down? >> If you look at this, it's really it has been actually quite disappointing. And I think it was just expectations got too far ahead when we talked about it in in March. the, you know, the expectations were that they would continue to see tailwinds, which they have.

Since then, they've also completed an acquisition which diversifies the company and builds it out further. But I think at the same time, there's been some concerns as to whether or not one of their big clients, which is Palunteer, isn't trying to produce their own uh batteries. That's one of um Kraken's specialties is these underwater batteries that can operate under pressure and in under the sea and um Palunteer's been um posting job postings for battery engineers and so the thought is that perhaps they might start to build that out.

It's um it's a good example of and you know we've talked about this Mela you and I have talked about this before but how important it is to manage position sizing and also have a process on when to hold when to add or when to get out with these smaller companies. And and this is probably a case in point in that we owned it, we got stopped out, we're out, but now we're actually starting to look at it again. We haven't gone back into it, but it's it's one that we certainly think that there's opportunity there, and it looks like it's been basing and could potentially start to the next move up. >> All right, let's take a break.

We're going to have Bruce Campbell stick around to answer your questions. Again, taking your questions today on Canadian stocks. Back in a moment. [music] Welcome back. Gordon is on the line. and he's in Victoria, BC with a question. Gordon, go ahead. >> Good morning. Every quarter, Propel Holdings trades up and then it trades down. And that on the downside, it seems to be based on sentiment that's disassociated from the results and the profile of the actual company.

I wonder what you think about that and Propel in general. >> Okay, thank you for the question. Propel was at its height uh start of last year, 2025, when it went up past $42. uh we can see where it is today at 24. What are your thoughts on what Gordon describes in the situation where it it he thinks it's not associated with the earnings very well? >> I would agree 100% and I'm sure management is probably very frustrated.

They're large shareholders in this. They continue to grow and produce exceptional results really every quarter. The quarterly numbers obviously will jump around a little bit. they continue to increase strong quarterly numbers. They can continue to increase their dividend. And at the same time, the stock price is trading up and down. The concern is is that this is um this is in, you know, what most people refer to as subprime lending.

I don't necessarily know if that's 100% accurate with what they've done with their lending book, but that's certainly the view that and and the brush that it's painted with. And as a result, the market gets concerned about what's happening there. We saw what happened with go easy here in Canada. And that really affected I think a lot of investors who are looking at the sector and that would have also affected Propel.

The um they've been pretty deliberate about what they've done. So if you look at the last quarter, they talked about certain areas of their business actually not increasing at the same rate that they had, but that their their margins had improved. And one of the reasons for that was because they were taking their technology, which has an AI base to it, and applying more stringent standards to make sure that if we saw a downturn that they wouldn't be affected in any great way.

So, they were actually being proactive to what the market's concerned about and it still affected the stock price. So, I can only imagine that that um the management team is probably very frustrated with it. It's one that we owned in the past. It continues to screen well for the earnings acceleration, but we just really haven't seen that translate into a sustained stock price. And as you mentioned um you know it has as the quarters it bumps up a little bit and then it just seems to consolidate after that and and fade backwards.

So it is a little bit on the frustrating side. If they continue to do what they're doing I suspect at some point in time there's going to be a bigger uh bigger company that comes in and just says okay thanks very much and and buys the mode. >> All right let's go to the next caller. Sean's in Victoria. Sean go ahead. >> Yes good day. Um my question is what is your general thoughts uh about ETFs? Uh particularly I'm looking at XIU.

Uh if you kindly give me your opinion on that. Thank you. >> Okay. Thank you for the question. XIU. So that's the largest and liquid 60. Is that correct? >> Yeah, that's right. It's the the TSX 60. So generally on ETFs, we don't do it a lot on ETFs. We generally will look at the ETFs though to track what's happening with sector flows and one of the things that we talked about and and kind of touched on a little bit at the top of the show was just what's happening and where the market could potentially going be going and you've seen this reaceleration now in the mag 7 in the US and that's as the market in our opinion the market's starting to be a little bit concerned about you know where growth goes given that rates are starting to increase and it's moved up cap in the market.

So the TSX60 would be the best place to be in Canada because you're in the the strongest or the largest 60 companies. The one caveat to that is that you want to kind of watch is just the banks because if we continue to see this interest rate margin compress, it's going to be more difficult for the banks to be making their interest margin. And then the second thing is that if we do see some type of slowdown in capital markets, that's going to affect their um their capital markets business both from a from a from a um mergers and acquisitions and financing perspective, but also from their investment management, wealth management arms, and that the banking sector makes up a big part of that TSX60.

So just something to be be aware of if you're investing in that. >> Let's go to the next caller then. Uh we have or sorry an email from Devon. Uh you had previously mentioned uh Rocket Doctor AI so aid on market call. Are you still bullish on the stock? Do you think they could become profitable in 2027 or is this a much longer hold for meaningful share upside? And is it worthwhile to add at the levels or is it better to wait until they start generating that profitability? uh this is I guess software where they take doctor's information but they can give you I don't know if they give you sort of a diagnosis or what kind of feedback they give you.

Can you explain a little bit more about how it works? >> There's really two parts to their business. So the first part is that um that they have a um a medical system that effectively allows you to to be almost tele medicine. So that's the first part. The second part is is that they're starting to help doctors on two fronts. One is to to manage and streamline their own businesses, but the second is is to also uh start to triage people before they get to the doctor.

If you've been in an emergency room or a um even a a clinic, you know that there's a lot of that weight is because they have to triage people to figure out what's wrong with them before the doctor can see them. So by answering some questions that they have their own library of knowledge with AI, that library of knowledge is able to diagnose pretty accurately where the doctor should be then looking, what kind of tests the doctor should be thinking about, and it just cuts down time for for everyone.

There's also areas, you know, we've seen lots on the news where there's there's critical care areas that aren't aren't getting that critical care because of lack of doctors. So they're able to service some of those areas. You've seen them expand here in Canada and they've got pretty good uptake, but now they're really starting to expand in the US. And this is where things could get interesting is they've added a number of the big uh healthcare providers in the US as they start to get adopted.

That's where the numbers could flow. And and from the last that I saw, they were projecting that they should be profitable in 2027. >> Okay. So uh just wondering because it's a software stock but clearly they're using AI in their platform they are not likely to be disrupted then by another sort of AI agent. >> No. One of the beauties of what they've done is they have their own body of knowledge. So they built their own library that's closed source that isn't open to anyone else.

I guess someone could go and try to build that same library to compete with them, but that's going to be, you know, take them a few few years to get done. And then the second thing is that they've already started to get adopted by those health providers. And as a result of that, that's also given them a huge head start. So someone could could, I guess, say, "Hey, we want to get into this business and do it." But Rocket Doctor has a a huge head start on anyone else and they're getting they're getting that traction now.

All right, let's take a break. We're going to come back and answer more questions in just a moment. Stay tuned. [music] >> Welcome back. Sydney is on the line in London, Ontario with a question today for Bruce Campbell. Sydney, go ahead. >> Hi, thanks for taking my call. Um, I've got a question about premium brands. Um after the last uh release of their quarterly results uh the stock price went down a lot because they lowered guidance but um then it kind of stayed steady but now it's dropped a lot again.

Um do you think the stock is being um punished a little bit too much or what are your thoughts going forward on Premier Brands? Is this a good time to buy or Yeah. What are your thoughts? Thank you. >> Thank you for the question Bruce. Go ahead. >> Premier. Yeah, Premier Band's certainly been a challenging one. This was, you know, one of those companies that for years was was a fantastic compounder and now it's been a little bit more choppy.

They did that Stampede acquisition that closed um I believe it was the beginning of this year if I remember correctly and that was a fairly significant um transaction for them and it was also their first real big transaction into the US which they're working through integrating. The second catalyst that they're that that's affecting the price I I believe is that a lot of the commodity prices so beef in particular have been rising and as a result that has has impacted their margins and so that integration and the margins are two things as you mentioned they did revise their guidance down uh for the next year but they still kept their longer term guidance in place which was the $10 billion number that they talked about and so so the the management's confident that that will over time and they've been fairly good acquirers of businesses.

This Stampede transaction was clearly a bigger transaction and they they hit were kind of hit with some commodity price challenges at the same time. But if you look at you know what management's done over time, they have a really strong track record. So if you're a longer term holder, it's certainly one that that um you know you probably want to hold on to or or potentially even add as it starts to bottom here. >> That was for Sydney.

Let's go on to Jan in Toronto. Jan, go ahead. >> Hi, Liz. My question is on Adex Technologies. The company did come off its highs, but fundamentally continues to execute. I would love to know your thoughts at this point in time. >> Okay. Thank you for the question. Uh, AAX Technologies, uh, trending down. We don't have a chart, so I'm just going to let you know where it's at, which is 1682 uh, today. It was 6550 uh, in May.

So, a really deep slide. what's been going on here. >> It was um I think it's just a function of the market getting really excited and then really concerned. And you know, if you think about Warren Buffett, he talks about Mr. Market being, you know, one polar one side or the other. And I think that's exactly what's happened here is that Mr. Market got really excited about Abex and the opportunity, which is if you remember what they do, they've built um some new commodity contracts, a new commodity exchange.

So that's the first part of their business. And then the second part is that they're working on uh tokenization of the delivery and settlement of those not just those contracts but other commodity contracts. And the market got really excited about both of those as they were seeing increased um commodity transactions and more volume going through on each of the commodities that they have. And then there was a short report that came out which looked at the fact that a lot of the volume was market making which is normal.

They weren't doing anything that was nefarious at all and the market really just kind of shied away from that. I think it's going to take time just to build a base and then you'll probably see it start to move up again. This has some really uh really significant shareholders who are you know who would have dug very deep into what this means both from what's happened but also what the potential is and I think that these large shareholders that own the stock are looking at this for you know years to come and what this means and we know that typically with these exchanges there's not a lot of them and there's certainly not a lot of new ones that are coming up and it tends to be a duopoly and there also tends to be a lot of uh acquisitions that are done in that sector once they get to a certain size.

So, we uh we we owned it in the past. We don't own it right now, but we certainly are watching to see exactly what they uh what they're doing and and when that volume starts to reacelerate. >> Okay, let's move on to another caller then. Jason's on the line in G, Ontario. Uh Jason, go ahead. >> Hello. Thank you for taking my call. I'm inquiring about Saturn oil and gas. I assume they've done some terrific things this year and I don't think the market's been fairly valuing them.

I just want to get your opinion. Thank you very much. >> Okay. Tell me about Saturn. >> Yeah, Saturn's a light oil producer in the Western Canadian Sentimentary Basin and what they've been doing is they've been making acquisitions and then just going about their business of enhancing the production from those facilities. And I don't necessarily know if they have got as much respect for what they've done as they have.

It's a smaller company. It's, you know, less than two billion. And then they have a fair bit of debt on the books as well. And I think that might be one impact that the market's looking at. And um but but from an execution standpoint, the management team has done really well. We don't own it. Um we have in the past, but we don't right now. >> Okay. Let's try and squeeze in another caller then before we have to take a break.

Vahed is on the line in Victoria. Vahed, go ahead. Yeah, nice to see you Bruce again. I would like to hear your opinion about CNQ for long term, maybe two, three years. >> Okay. >> Is it it good time to get in now or later? Thank you. >> Thank you for the question. We have the CNQ chart uh up right now uh with oil that we were talking about sort of at the start of the show. CNQ's uh already had a really decent run this year.

Would you put some new money in where it is today? >> Well, when you're talking sort of that 3 to five year time frame, I do think that, you know, over time we'll continue to see uh the um the oil and gas sector and and CNQ does have more of a focus on on the gas start to, you know, or continue to improve. There's going to be more focus on major projects here in Canada. We know that that's been something that's announced by the government and we would, you know, most likely think that that probably comes in the form of another LG facility and production facility.

Uh that would allow our um our gas to get to other markets. So, this would be something that would certainly help CNQ over um you know, over that time frame if we could get another facility up and built and and running. >> All right, let's leave it there. We're going to come back with some new picks from Bruce Campbell in just a moment. Stay tuned for that. Join us on Monday for market call. Paul Harris [music] on the show.

He's portfolio manager at Harris Douglas Asset Management. They'll take your questions on North American and Global Stocks. That is [music] on Monday. Let's get to some new topics from Bruce Campbell. Altius Minerals is where we start. ALS on the TSX. This is a royalty company. Bruce, why do you like it? >> It is. We um we think that you know we've joined or started a new commodity um cycle here. We certainly have seen that from the the pricing of the commodities.

But what's interesting about Altius is that they have these uh 13 royalties in the mining area and then they have 15 renewable um projects that are also under royalty. And what you get with um with Altius is that you get that upside because they have um they have the these royalties, but you don't have to deal with any of the operating cost um issues. The company's been very good at at diversifying their portfolio. They've got a number of different mining areas, but they also have the renewable areas.

And then if you look at what they've been doing, they don't have a large dividend, but the dividend continues to increase. So over the last decade, I think it's almost tripled the the dividend rate that um they originally started off with and I suspect that that continues to happen. The catalyst that we look forward going forward is that they continue to have, you know, a fair bit of cash that they just did an equity raise and then they also have a line of credit revolver that would allow them to make more um make more investments to to build out their royalty portfolio.

Let's get to your next top pick then which is a TMX group X on TSX. Um again I think this stock was was had the rug pulled out from under it because the concerns about AI taking over. This is essentially a tap into data. How do you feel about the business model and what it has to offer in the face of AI? >> Uh certainly we we like it a lot. We think that that data is important. Um and it's interesting because the concern was yes there was some AI concern there was also some potential um tokenization blockchain concerns around around the exchange but the reality of the situation is that that AI that's out there's going to be more demand for the information and the statistics that the TSX can produce and at the same time they've moved to diversify their business by moving more internationally and then if you think about that blockchain tokenization settlement.

That's something that isn't going to have that big of impact on them now. It's it's potentially down the road, but it's probably something that they also get involved in as well. So, we think that um you know this the lull that we've seen in the stock was actually an opportunity and that's where we started to pick it up. >> So, you started to pick it up where where it has been more lately. >> Yeah, in the last three months was where we started to initiate our position.

All right, let's get to your final pick then. Uh, so we get a lot of questions about it, which is Celestica CLS on the TSX, which is, uh, sort of in the AI buildout sphere and has been >> down, which has made people sort of wonder what's going on with Celestica. Why do you like it right now? >> I think that um, you know, we continue to see the AI buildout happen. There's clearly been a lot of back and forth on, you know, fits and starts of like are we topping out or are we not.

One of the things that Celeste has talked about and I think that they're having their investor day at the end of October and it at that point in time, I'm sure they're going to shed more light on this, but the actual recycling and kind of the the hardware upgrade cycle, we know that that's pretty pretty normal with technology. And what the expectation is right now is that this buildout of AI is going to last into, you know, 2028, 2029.

But at that point in time, we're going to also probably start to see a replacement cycle that's needed. And Celestica's right there to capitalize on that as well. And if you've looked at, you know, their numbers, they continue to have amazing numbers that are growing not in the teens, but in the, you know, the the 20s and 30s. And at the same time, their their multiple is not cheap, but when you look at the growth rate that they've had, it's been fairly um fairly good in in that comparison basis. >> I have about 30 seconds, but is it a new position for the firm for you? >> It is.

Yeah, we've just uh well, we we held it before and then we got stopped out of it and we've just recently gone back into it. >> All right. Uh good name to leave us with. Let's uh leave it there. Bruce, thank you for showing up. Appreciate your time. >> Thank you so much. And thank you for joining us today in market call. We'll see you back here again on Monday.