Market Call: Tim Regan's outlook on North American Equities (April 20, 2026)

Key Concepts

• Market Strategy: A "look-through" approach that ignores short-term volatility in favor of long-term fundamentals and cash flow.
• Oligopoly: A market structure dominated by a small number of large firms (e.g., Canadian banks, telecommunications).
• Net Asset Value (NAV): The total value of a company's assets minus its liabilities, used to determine if a stock is undervalued.
• Alternative Asset Management: Investment firms (e.g., Blackstone, Brookfield) that manage private equity, credit, and infrastructure.
• Challenger Bank: A smaller, digital-first bank (e.g., EQB) that competes with traditional "Big Six" banks by leveraging lower overhead costs.
• Tuck-under Acquisitions: A strategy of acquiring smaller companies to integrate into a larger business to drive growth.

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1. Macroeconomic Outlook and Strategy

Tim Regan emphasizes that investors should ignore daily market "roller coasters" and focus on long-term cash flow.

• Oil Prices: The real impact of oil prices is felt at the pump, which influences consumer sentiment and, consequently, political decision-making in the U.S. ahead of midterms.
• Trade Uncertainty: Capital investment remains soft due to ongoing trade renegotiations between Canada and the U.S. While perfect clarity is unlikely, businesses require more certainty to plan effectively.
• Interest Rates: Future rate paths depend on whether inflation is temporary (driven by gas prices) or structural. Regan suggests that if the economy slows into a recession, rates may need to be adjusted lower to support the housing market.

2. Sector Analysis and Company Insights

Technology and AI

• Oracle: Viewed as risky. Despite being a tech giant, its high valuation is based on optimistic AI bets that have yet to translate into consistent cash flow.
• Microsoft: Recently added to the portfolio. Regan highlights the "closed environment" of their AI integration with OpenAI as a significant competitive advantage.
• Uber: Considered a strong long-term hold. The company is effective at "rolling up" competitors and is well-positioned for future developments in autonomous vehicles.

Financials and Banking

• Canadian Banks: Described as "perpetual cash machines" with high returns on equity (20–40%). Regan advises holding them long-term rather than trying to time a correction.
• U.S. Banks (Citi, JP Morgan): Viewed as safer than in 2008–2009 due to regulatory changes. They are currently benefiting from strong capital markets and trading businesses.
• EQB (Equitable Bank): A "challenger bank" that successfully utilized a digital-first model to avoid the high costs of physical branches. The acquisition of PC Financial is seen as a major growth catalyst.

Real Estate and Infrastructure

• Allied Properties: Trading at a significant discount to its NAV. Despite recent management missteps, the quality of the assets makes it a potential takeover target.
• GFL Environmental / Secure Waste: The acquisition of Secure by GFL is viewed as consistent with GFL’s strategy. Regan suggests holding Secure shares, as a "sweetened" offer remains possible.
• Telus: Currently struggling with integration issues from past acquisitions. Regan notes that the arrival of a new CEO (Victor Dodig) on July 1st could trigger a major retooling of the company, potentially including asset sales.

Commodities and Niche Sectors

• Gold Miners: Regan maintains a "ten-foot pole" policy regarding gold stocks. He argues that gold miners often fail to track the price of gold, suffer from poor capital allocation, and are prone to management overreach.
• Wine Industry: Considered a difficult, low-margin business hindered by inter-provincial trade barriers and shifting consumer preferences toward non-alcoholic beverages.

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3. Top Picks and Portfolio Management

Regan provided three specific "Top Picks" for long-term growth:

1. Allegion PLC: A global leader in security (locks and electronic keys). It is a "boring" but essential business with high aftermarket revenue and a growth strategy focused on electronic security.
2. Colliers: A diversified real estate services firm. Beyond its brokerage business, it has a growing asset management arm and an engineering services division that is expected to double in revenue over the next five years.
3. EQB: Highlighted for its digital efficiency and the strategic value of its PC Financial acquisition.

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4. Synthesis and Conclusion

The overarching theme of the discussion is patience and fundamental value. Regan advocates for a "sector-agnostic" approach, preferring to hold cash rather than force investments into industries he dislikes (like gold or high-risk engineering). He emphasizes that for companies like Telus or Power Corp, the entry price is as important as the quality of the business. The primary takeaway is that investors should look for companies with strong management, clear paths to cash flow, and the ability to execute "tuck-under" acquisitions to maintain growth in a volatile economic environment.