Market Call: Greg Newman's outlook for North American Equites (June 25, 2026)

Key Concepts

• Market Breadth: The number of stocks participating in a market rally; improving breadth is seen as a sign of a healthy, balanced bull market.
• PEG Ratio (Price/Earnings-to-Growth): A valuation metric that relates the P/E ratio to the earnings growth rate; used to identify undervalued growth stocks.
• Nation Building Theme: An investment thesis focusing on infrastructure, energy, and engineering projects essential for national development.
• Sovereign AI: The concept of nations or companies developing their own AI infrastructure and data centers to maintain control and security.
• Options Strategy (Selling Puts/Calls): A risk management and income-generation tool used to enter positions at lower prices or enhance returns on existing holdings.
• Accretive Acquisitions: Deals that increase the earnings per share (EPS) of the acquiring company.
• ENC Firms: Engineering and Consulting firms.

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Market Outlook and Strategy

Greg Newman maintains a bullish stance on the North American equity market, despite macroeconomic headwinds such as persistent inflation, hawkish Federal Reserve policies, and geopolitical uncertainty. He argues that the market is currently an "earnings-driven story."

• Market Health: While the "Magnificent 7" tech stocks have historically led the rally, Newman notes that market breadth is improving, with 62% of S&P 500 and Russell 2000 stocks trading above their 200-day moving averages.
• Investment Philosophy: Newman emphasizes a bifurcated market of "haves" and "have-nots." He advocates for buying high-quality companies that have been unfairly punished by market fears (e.g., AI-related sell-offs) or are trading at attractive valuations relative to their growth rates.

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Sector Analysis and Specific Stock Insights

Energy and Infrastructure

• Canadian Natural Resources (CNQ): Viewed as a strong energy play with a solid balance sheet and 25% projected free cash flow growth (2025–2027). Newman suggests it offers downside protection even if oil prices drop to $50/WTI.
• Shell (SHEL): Recommended for taxable accounts due to its integrated gas business and dividend growth. Newman notes it is cheaper than peers like Exxon and Chevron.
• TransAlta (TA): Described as a "bell of the ball" in energy infrastructure, trading at a lower multiple (8.3x) than peers like Capital Power (9.1x).
• TC Energy: While strong, Newman views it as expensive (23x 2028 earnings) and suggests selling calls rather than adding fresh capital.

Technology and Software

• Nvidia: Highlighted as a "crowded trade" that remains an opportunity due to its 25%+ growth rate and reasonable 23x P/E ratio on a PEG basis.
• OpenText: Identified as a "deep value" play trading at 5.2x earnings with a 4% dividend, despite stagnant price action.
• SpaceX: Newman advises caution, labeling it highly speculative due to a $2 trillion valuation with limited profit. He suggests Tesla as a more grounded way to gain exposure to Elon Musk’s ventures.

Financials and Services

• TD Bank & Royal Bank (RY): Both are seen as having strong earnings growth. Newman suggests using options (selling calls) to manage positions as they approach historical highs, rather than selling outright and triggering capital gains taxes.
• Colliers: A "have-not" stock trading at 11x 2027 earnings, significantly cheaper than banks, despite a 12% growth rate.

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Past Picks Review

• AtkinsRéalis: Down since the previous recommendation due to Middle Eastern conflict concerns and AI-related sector rotation. Newman remains bullish, citing a 16x P/E and 17% growth.
• Kiiara: Up 24%. Newman maintains a "buy" rating, citing the integration of the Plains acquisition and strong data center demand.
• Tourmaline Oil: Down 7%. Newman views this as a long-term hold that pays a dividend while waiting for the natural gas market to turn.

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Top Picks (New Recommendations)

1. Netflix: Despite a 30% decline since April, Newman calls it a "secular growth story." It trades at 15x earnings with 15% growth, benefiting from scale and expanding margins.
2. Brookfield Infrastructure (BIP.UN/BIPC): Offers a 5% yield and 11% AFO (Adjusted Funds from Operations) growth. Newman highlights the potential for value unlocking through corporate restructuring.
3. Stantec: An engineering firm trading at 14x earnings with 14% growth. Newman expects organic growth to accelerate as projects ramp up, particularly in Germany and water infrastructure.

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Synthesis and Conclusion

Greg Newman’s strategy centers on disciplined valuation and patience. He acknowledges that the market is not moving in a straight line and that certain sectors (like engineering and software) are currently being punished by irrational fears regarding AI and geopolitical instability. His actionable advice involves using options to enter positions at lower prices (selling puts) or to generate income on existing holdings (selling calls) while waiting for the market to recognize the underlying value of high-quality, growing companies.