Craig Jerusalim, senior portfolio manager at CIBC Asset Management Inc.The Globe and Mail
Money manager Craig Jerusalim says global trading partners, including Canada, have been spoiled having access to the “biggest and best” U.S. consumer market at relatively low prices – until now.
“Overall, the cost of doing business with the United States is going up,” says the senior portfolio manager at CIBC Asset Management Inc. in Toronto, citing the new era of tariffs imposed by the Trump administration.
While the trade threat is changing constantly, Mr. Jerusalim says affected Canadian companies that can navigate through the uncertainty will come out ahead.
Meanwhile, he’s been using market swings to buy stocks he believes will outperform and sell those that may have run up too fast in the recent rebound.
“We’re just looking for best-in-class businesses that are underappreciated – and we’re willing to pay a premium for companies if they deserve it. That said, we try not to overpay for our companies,” says Mr. Jerusalim, who co-manages about $9.5-billion in assets across two strategies: Canadian growth at a reasonable price (GARP) and Canadian dividend growth.
CIBC Dividend Growth Fund was up 23.5 per cent over the past year. Its three-year and five-year annualized returns were 13.9 per cent and 15.3 per cent, respectively.
The GARP-focused Renaissance Canadian Growth Fund is up 21.5 per cent over the past 12 months and has a three-year annualized return of 15.2 per cent and a five-year annualized return of 14.6 per cent. The performance is based on total returns, net of fees, as of July 11.
The Globe spoke with Mr. Jerusalim recently about three stocks he likes – including one small, one mid- and one large-cap company – and some recent trims:
Name the three stocks you own and continue to buy.
DRI Healthcare Trust DHT-UN-T, the Toronto-based pharmaceutical royalties company, is a stock we’ve owned since it went public in early 2021 at $10 a share and have been buying steadily this year.
It’s had an impressive start to 2025 and has achieved two transformative milestones that positioned the company for significant re-rating moving forward.
The first was the accretive internalization of the trust’s manager – removing a third-party manager – which not only fully aligns leadership interests with those of shareholders but also reflects best-in-class governance practices.
The second was, following a brief delay, the U.S. Food and Drug Administration’s approval of a Stage 3 drug that DRI holds a royalty interest in, driving an estimated 15-per-cent increase in the company’s net asset value.
Despite these achievements, the stock continues to trade at a double-digit discount to its net asset value, which will continue to grow with future capital deployments. Meanwhile, shareholders benefit from a fairly robust 4-per-cent dividend yield, providing predictable income as the company’s valuation potential unfolds.
The company underwent a leadership change last year, and the current leadership and investment team are very strong.
Element Fleet Management Corp. EFN-T, the world’s largest publicly traded fleet management company, is a stock we’ve owned for several years and continue to add to our portfolios, including during the market downturn earlier this year.
Element Fleet operates in North America, New Zealand and Australia. We expect its double-digit growth trajectory to continue well into the future. With its robust leadership and unmatched scale advantage in fleet management, we believe the company is well-positioned to expand its service offerings beyond basic fleet management into areas such as fuel management, telematics, insurance and financing, which will help boost margins.
Another positive that I don’t think is fully appreciated in the stock is the passage of the One Big, Beautiful Bill in the U.S., which introduces a significant tailwind in the form of bonus depreciation. What that means is when you buy the vehicle, the capital expenditure can be depreciated up front, as opposed to over the life of the vehicle. So, you’re getting the tax savings in year one. That’s expected to enhance profitability further and strengthen Element Fleet’s competitive position.
Fairfax Financial Holdings Ltd. FFH-T, the Toronto-based reinsurance and property and casualty insurance company, is a stock we bought back in early 2023 and added more of recently.
When we first bought it, the stock was at a multi-year high, but that didn’t scare us. We identified it as being undervalued at the time. The company has seen a meaningful and deserved re-rating of its valuation driven by both improved profitability and higher return on equity. Despite that, it remains one of the most attractively priced large-cap insurance companies on the Toronto Stock Exchange.
We think there are going to be some big windfalls coming from their investment portfolio in the next quarter that investors should cheer. Adding to its appeal are ongoing share buybacks, which provide a steady tailwind for the stock. Also, Fairfax currently holds the distinction of being the largest company on the TSX that’s not part of the bellwether TSX 60 index. I don’t know when it will be added, but it will be a significant positive catalyst when it is.
Name a stock you recently sold.
We recently trimmed our positions in energy companies Suncor Energy Inc. SU-T and Canadian Natural Resources Ltd. CNQ-T after the recent spike in oil prices during the heightened tensions with Iran and U.S. President Donald Trump’s ‘escalate to de-escalate’ strategy [in late June]. We anticipated a stabilization in prices to the high US$50- to mid-US$60-a-barrel range.
Although Suncor and Canadian Natural Resources remain quite profitable at those levels, we trimmed each of those positions by about one-quarter and put the money to work in other sectors. They both remain long-term core holdings.
This interview has been edited and condensed.