Here are 3 Canada Stocks Poised to Gain in Trump 2.0

By Will Ashworth

We are a month into Donald Trump’s preparations to become President of the United States for a second time. So far, the markets have liked what they’ve seen from his economic appointments. 

The S&P 500 gained approximately 6% from the Nov. 4 close (the day before the election) through Dec. 5. The S&P/TSX Composite is up slightly less but generally keeping face despite the threat of 25% tariffs from the Trump administration. Prime Minister Justin Trudeau’s visit to Mar-a-Lago in late November helped calm investor nerves here on the northern side of the border. 

We shall see what transpires closer to the Jan. 20 inauguration; Meanwhile, back to the stock picking.   

So far, I’ve selected 24 stocks from seven mutual funds and one index, with nine sectors represented by at least two stocks. Financial services has the highest representation, at four. I’m capping sectors at 20%, so with six stocks left to pick  — three today and three more in the coming days — there’s little chance of hitting the cap in any sector.

The three for this installment have been selected from the Canoe Canadian Small Mid Cap Portfolio Class. Launched in December 2006, it has $277 million in net assets, invested in 62 stocks.  

Its objective is to buy stocks with quality businesses, higher liquidity, and reasonable valuations relative to its benchmark S&P/TSX Small Cap Index. The stocks I select will have market caps between $100 million and $10 billion.

Happy Investing.

Toromont Industries (TIH)

Toromont Industries (TSX:TIH) is one of the fund’s top 25 holdings, at a 2.7% weighting. 

It represents the industrials sector and has a market cap of $9.3 billion, at the high end of my range. However, I’ve always had a soft spot for Caterpillar (NYSE:CAT), so I’m excited to be including CAT’s Concord, Ontario-based dealer in my Canadian SMID-Cap 30. Its shares are up 68% in the past five years, 18 percentage points higher than the S&P/TSX Composite Index.

Toromont is probably already on your radar if you're a dividend investor. It’s paid dividends every year since 1968. I’ve never understood why it hangs on to CIMCO Refrigeration, its commercial refrigeration business, because it only generates 9% of its revenue. I’ll get into this subject in the future.

Like many businesses trading on the TSX, it does not have a controlling shareholder. According to S&P Global Market Intelligence, its largest shareholder is RBC Capital Markets, which owns 12.6% of the company's stock.

PrairieSky Royalty (PSK)

PrairieSky Royalty (TSX:PSK, OTCMKTS:PREKF) is not in the Canoe fund’s top 10 holdings. However, it is in the top 25 with a 2.5% weighting. Prairie Sky’s market cap is $7.0 billion.      

As its name implies, this is a pure-play energy royalty company. It generates royalty revenues from oil and natural gas produced on its 18.1 million acres of properties across Western Canada. It is one of Canada's largest owners of mineral titles and oil and gas royalty interests. 

As a shareholder, you benefit from distributions of its cash flow through dividends and share repurchases. 

Based in Calgary, it has returned $1.9 billion to shareholders since its IPO a decade ago. Its shares are up 105% over the past five years.

Andlauer Healthcare Group (AND)

Andlauer Healthcare Group (TSX:AND, OTCMKTS:ANDHF) is the 19th-largest holding of the Canoe fund, with a 2.1% weighting. It is the only healthcare stock in the fund, and it has a market cap of $1.7 billion. 

You might be familiar with CEO Michael Andlauer if you're a hockey fan. 

He and some partners acquired the Ottawa Senators in September 2023. On Oct. 2, the Senators announced that the NHL approved Andlauer's purchase of another 12% of the hockey team from George Armoyan, one of the team’s original partners. 

Andlauer Healthcare Group became an independent company in December 2019 when Michael’s holding company, Andlauer Management Group, spun it off. After the IPO, including the exercise of the over-allotment option from underwriters, Andlauer Management Group’s ownership of the equity fell to 67.0%, while it still controlled 89.0% of the voting power.   

Its clients include large pharmaceutical companies and drugstore chains. It has 32 leased facilities from coast to coast. 

Until next time. 

Disclaimer: The author did not hold a position in any of the securities mentioned above. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research or consult with a licensed financial professional before making any investment decisions. Past performance is not indicative of future results.

Will Ashworth is currently ranked 117 out of 30,273 financial bloggers analyzed by TipRanks, with a 18.5% return on his buy and sell ratings. He is one of the founding contributors to this newsletter. 

Will has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.