Market Call: Matt Kacur's outlook on North American Equities

Market Call with Matt Kaser - January 6, 2026 Summary

Key Concepts:

• North American Equities: Focus on current market conditions and investment opportunities within North American stock markets.
• Technology Sector: Continued strength and potential, but with a need for portfolio balancing.
• Materials Sector (Gold & Precious Metals): Attractive due to geopolitical risk and inflation hedging, with strong fundamentals in the industry.
• Energy Sector: Underweight position, with limited enthusiasm despite potential opportunities in specific companies.
• Quantamental Analysis: Combining quantitative (data-driven) and fundamental (company-specific) analysis for investment decisions.
• Return on Invested Capital (ROIC): A key metric used to evaluate company performance and investment potential.
• Cyclical Stocks: Understanding the impact of economic cycles on stock performance, particularly in commodity-related industries.
• Dividend Yield & Sustainability: Assessing the attractiveness and reliability of dividend payments.

1. Market Overview & 2026 Outlook

Matt Kaser anticipates 2026 will not be as strong as the previous three years (2023-2025), which saw average annual growth of 23% – significantly higher than the long-term average of 8-9%. He views expecting continued 20%+ growth for a fourth consecutive year as “unreasonable.”

2. Technology Sector Analysis

Despite acknowledging the exceptional performance of the tech sector in recent years, Kaser states FCA Valuation Service will not be backing off technology stocks. Tech remains their heaviest-weighted sector and the largest weighting in the S&P 500. However, they are “a little touch overweight” and are practicing normal rebalancing, trimming positions exceeding 7-8% in a single name. He emphasizes the sector’s strong fundamentals, growth, earnings, and return on capital, dismissing the recent run as speculative.

3. Materials Sector – Focus on Gold & Precious Metals

Kaser favors the materials sector, particularly gold and precious metals, driven by geopolitical risk and inflation. He notes that gold stocks appear “really cheap” despite potentially limited price movement, citing “tremendous cash flow,” high return on capital, and restrained mining activity. Revenue growth and margins remain strong within the sector.

4. Energy Sector – Underweight Position

Kaser maintains an underweight position in the energy sector, expressing limited enthusiasm. While acknowledging Canadian Natural Resources (CNQ) as “one of the better ones in Canada,” he doesn’t see significant strength in the overall space. He notes improving Return on Invested Capital (ROIC) for CNQ, but overall remains cautious. Recent news regarding Venezuela and potential increased oil supply further reinforces this view.

5. Specific Stock Analysis & Recommendations

• Canadian Natural Resources (CNQ): Top quartile within Canadian oil and gas, but not a top-tier pick.
• Royal Bank of Canada (RY): A “buy and hold” stock, consistently well-run and not overly expensive. He doesn’t believe a stock split at the current price ($238) would significantly impact accessibility.
• Fortuna Silver Mines (FSM): A preferred silver equity play, showing improving fundamentals and a strong return on capital.
• Thomson Reuters (TRI): Difficult to model due to frequent acquisitions and spin-offs. Prefers alternatives like S&P Global (SPG), MSCI, and FactSet, which offer recurring revenue and high return on capital.
• Accenture (ACN): Views the market’s concern about AI as an overreaction. Believes Accenture can capitalize on AI implementation and consulting opportunities.
• Enbridge (ENB): A high-quality company, suitable for long-term holding. Recent geopolitical events shouldn’t significantly alter the investment thesis.
• Procter & Gamble (PG): A defensive play, offering potential for recovery after a significant price pullback. Revenue growth is slowing, but margins remain stable.
• Aimtech (AMTC): A strong company in the grid infrastructure and data center space, with consistent return on capital and a positive price trend.
• Lululemon (LULU): A potential opportunity due to a significant price pullback, despite increased competition. A new executive leadership could drive positive change.
• Rio Tinto (RIO): A solid long-term hold, benefiting from improving commodity prices and a diversified portfolio.
• Mosaic (MOS): A good opportunity due to a recent pullback, with improving fundamentals and a strong return on capital.
• Northland Power (NTP): A solid idea, particularly with the restructuring story.
• Telus (T): Similar to Bell, a stable company with moderate growth and a reliable dividend.
• Suncor (SU): Affected by Venezuelan news, but a potential recovery play.
• Cenovus Energy (CVE): Also affected by Venezuelan news, with limited upside.
• Broadcom (AVGO): A top-tier semiconductor company, benefiting from the increasing demand for data transmission. Strong revenue growth and return on capital.

6. Methodologies & Frameworks

• Quantamental Analysis: Kaser’s firm utilizes a combination of quantitative data analysis and fundamental company research.
• Return on Invested Capital (ROIC) Focus: ROIC is a primary metric used to assess investment opportunities.
• Policy-Based Rebalancing: Positions are trimmed when they exceed a predetermined percentage (7-8%) of the portfolio.
• Cyclical Analysis: Understanding the cyclical nature of commodity-related industries to identify potential entry and exit points.

7. Notable Quotes

• “You’d be kind of foolish to expect as good, especially not just this year, but the last three years have been spectacular.” – Regarding expectations for market performance in 2026.
• “This is not some kind of speculative kind of market run. This is just like real good fundamentals right now.” – Describing the current tech sector performance.
• “There’s real growth there. There’s real earnings. There’s real return on capital.” – Emphasizing the underlying strength of the tech sector.

8. Data & Statistics

• 2023-2025 Market Growth: Average of 23% year-over-year.
• Long-Term Market Average: 8-9% annual growth.
• Amphenol (APH) Return: 24% upside, 25% total return since August 6, 2025.
• Microsoft (MSFT) Return: -10% since August 6, 2025.
• Broadcom (AVGO) Revenue Growth: 24% (last four quarters).
• Broadcom (AVGO) Return on Capital: 41%.
• Lululemon (LULU) Revenue Growth: 6-7% (last three quarters).
• Aimtech (AMTC) Return on Capital: Consistently high, currently rising.

9. Logical Connections

The discussion flows logically from a broad market outlook to sector-specific analysis, then to individual stock recommendations. Kaser consistently ties his recommendations back to fundamental factors like ROIC, revenue growth, and margin stability. He also acknowledges market cycles and the importance of balancing risk and reward.

10. Synthesis/Conclusion

Kaser advocates for a cautious optimism heading into 2026, acknowledging that recent market gains are unlikely to be repeated. He recommends maintaining exposure to the technology sector, but with a focus on balancing the portfolio. He identifies opportunities in materials (particularly gold) and select companies within the energy, consumer staples, and industrial sectors. His investment approach emphasizes fundamental analysis, a focus on ROIC, and a disciplined rebalancing strategy. He stresses the importance of understanding cyclical trends and identifying companies with strong, sustainable business models.