We start this edition of Market Factors with a red hot stockpicker and the results of his screening for post-tax loss selling bargains. The next section deals with natural gas assets being bought by U.S. power producers, including nuclear energy companies, then the diversion covers some disturbing research about kids and cell phones.
Sid Mokhtari, chief market technician at CIBC Capital Markets.Supplied
Year-end investment ideas
Tax-loss selling creates buying opportunities for these stocks
CIBC analyst and technical strategist Sid Mokhtari’s monthly stock picks have generated terrific returns in the past few months. Late last week, Mr. Mokhtari turned his attention to tax-loss selling season, searching for bargains where stocks have already been sold down to deeply discounted levels.
The analyst has been screening for tax-loss selling candidates since at least early October and, in many cases, stock price weakness has been apparent. Last week he identified six stocks “that may be fundamentally strong but are temporarily down for idiosyncratic reasons or a change of macro narratives.”
All of the stocks are rated outperform by CIBC analysts and combine fundamental strength and technical readings suggesting positive mean reversion (a technical bounceback). The stocks are Boralex (BLX-T), Brookfield Asset Management (BAM-T), Constellation Software (CSU-T), FirstService Corp. (FSV-T), TFI International (TFII-T) and Thomson Reuters (TRI-T).
Mr. Mokhtari backtested his stock screen and found the resulting stocks rose 4.2 per cent on average between December 15 and January 31 compared with an average benchmark return of 1.6 per cent.
In terms of income, Boralex and Brookfield have decent yields at 2.7 per cent and 3.3 per cent, respectively. TFI (1.9 per cent) and Thomson Reuters (1.8 per cent) also pay a dividend.
Commodities
Natural gas blowout
Natural gas prices have ramped higher in North America and not just because traders remembered it gets cold in the U.S. Northeast. Natural gas, as one analyst wrote, “is an AI vertical.”
One month Henry Hub (U.S.) gas futures are up 82 per cent since mid-October and Canadian gas is higher by an even more dramatic 392 per cent since the end of September. Analyst James West of New York-based Melius Research partly attributes the move to data centre-related electricity demand.
Mr. West writes that “Though the hype around nuclear is real, the urgent need for reliable baseload assets will continue pushing the industry towards natural gas. Natural gas is an AI vertical.” He notes that major independent power producers in the U.S. - which includes Vista Energy Corp., NRG Energy, Talen Energy Corp. and even nuclear power provider Constellation Energy - have recently acquired natural gas assets.
A young man uses a cellphone at an MSF (Medecins Sans Frontieres/Doctors Without Borders)-run centre for minor migrants without a family in Pantin outside Paris on July 3, 2018.CHRISTOPHE ARCHAMBAULT/Getty Images
Diversions
Children and screen time - the data is in
Sure, the Futurism site can be prone to hyperbole, but Something Grim Is Happening to Kids Who Got Cell Phones Early still sent me down a really disturbing rabbit hole.
The initial column bluntly states the conclusion of a recent University of California, Berkeley and Columbia University study showing that cell phones used by children 12 and under increased their risks for depression, obesity and sleep disorders.
Lead study author Ron Barzilay, a psychiatrist at the Children’s Hospital of Philadelphia, noted that the phones’ negative effects on the amount of physical activity were particularly important.
A meta-analysis of numerous studies covering 18 age cohorts and almost 250,000 people found that increased screen time was associated with lagged development, psychosocial symptoms, obesity, sleep disorders and cardiovascular disease.
Studies with younger children found that anxiety scales with phone usage along with depression. It seems impossible to put the cell phone toothpaste back in the tube – limiting phone usage to marginal time per day when everyone I see stares at it for hours – so I suppose we’ll just go on poisoning our brains from an early age.
The essentials
Looking for our updates on market movers, analyst actions, stock technicals, insider trades and other daily, weekly and monthly insight? Click here to visit our Inside the Market page.
Globe Investor highlights
The TSX is on the cusp of a record-breaking year. Tim Shufelt explains what it needs to keep going
When it comes to dividends, take what management says about payouts with a healthy dose of skepticism, advises David Berman
The Fed could find itself in a bind as it sets the stage for Powell’s successor
Global central bank body BIX raises concerns of double bubble in gold and stocks
Quick Thoughts
Citi’s global outlook and strategy forecasts for 2026 is called “Goldilocks Performance, but Risks Linger”. I’m trying to figure out a way to make it sound even more bland, vague and unhelpful but I don’t think that’s possible. To be fair, there is some helpful analysis in the report, but geez, that title.
One of my least favourite market phrases is “event risk”. Really? Something might happen? Thanks.
I might write something detailed on it later but in the meantime Paul Krugman’s interview with Canadian expat (who wisely settled in La Jolla) and technology guru Paul Kedrosky is a must-read.
See our full earnings and economic calendar here