Barlow’s Research Roundup: Scotia mining analyst ‘highly recommends’ investments in these stocks

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Mining

Scotiabank analyst Orest Wowkodaw is bullish on miners despite input cost increases,

“We highlight four key takeaways from a stronger-than-expected quarter: (1) Operating margins remain relatively robust for most copper (Cu) miners in a +$6.00/lb price environment despite the impacts of materially higher diesel/energy costs ahead ($0.20/lb average impact). Although we have increased our Q2-Q4 C1 Cu cash cost estimates (ex-IVN) by an average of 10 per cent (to $2.13/lb vs. $1.93/lb previously), our average 2026E C1 forecast increased by only 5% (to $2.09/lb vs. $1.99/lb previously) due to a better Q1. Expect formal cost guidance revisions in Q2. (2) Only ANTO and CS have material exposure to escalating sulphuric acid prices; however, cost impacts are largely deferred until Q4 due to fixed price contracts. (3) FCX was the only miner to materially cut guidance (Grasberg); as a silver lining however, this setback (along with Kamoa-Kakula) has materially improved the multi-year outlook for the Cu market and is bullish for prices … (4) Valuations appear relatively attractive at robust spot prices as the Cu miners are trading at an average premium to spot of only 3 per cent (vs. up 15 per cent in 2025 and up 18 per cent over the past three years).

“Our top pick for Cu exposure is FM. We also highly recommend exposure to CS, ERO, FCX, and LUN. We are restricted on HBM. Among the uranium, iron ore, base metal developers, and non-precious royalties, we prefer CCO, CIA, DML, DRR, IE, and NXE”

Energy

RBC Capital Markets analyst Michael Harvey assessed insider transactions in the oil and gas sector,

“Year to date, net selling but lumpy. Year to date the aggregate group have been net sellers, with insider filings across our coverage group showing net outflows of $17.6-million year-to-date based on discretionary transactions. The top net purchases by company have included TVE, PSK, and WCP, and top net sellers were HWX, TOU, and PEY. Sales at HWX comprised various executives and board members for a net outflow of 900,000 shares or $10.3-million. TOU transactions consisted of mainly purchases, but offset by one large disposal to start 2026; of note Mike Rose has accounted for 68,500 shares purchased ($4.2 million) year-to-date. PEY follows a similar trend, with meaningful buying across the broader executive suite but one singular large disposal from Board Member Don Gray (190,000 shares; $4.5-million) driving the net disposal figure. Our screen includes only discretionary transactions, and excludes rolling sales such as annual RSU vesting to the best of our knowledge. Sales have reverted to the trend. YTD net selling is in contrast to the same period in 2025, in which transactions were tilted toward net purchases. We view consistent buying as a generally positive signal indicating management optimism about future value creation, while sustained selling, particularly when broad-based across multiple executives, can indicate reduced conviction. That said, context matters: isolated large disposals (as seen at TOU and PEY) can skew aggregate figures and do not necessarily reflect the outlook of broader teams.

“Our top names in the space tend to align with strong insider ownership and continued insider buying, which we see as a key differentiator.”

AI

Morgan Stanley analyst Shawn Kim believes the dawn of the agentic AI era is underway as described in a Monday report called Agentic AI – The Surge Begins,

“The ‘agentic economy’ is scaling faster than initially anticipated. This shift is already showing up in valuations – since mid-April ... CPU and memory stocks have reached new highs. Recent 1Q26 commentary from AMD, Arm and Intel points to a recent surge in highcore-count CPUs and orchestration-heavy workloads, as hyperscaler data center deployments increasingly require denser CPU infrastructure around GPU clusters. At the same time, reported 3- to 5-year memory LTAs [long term agreements] are emerging as a critical structural shift for the industry, extending pricing visibility and reinforcing durability in the cycle … The AI data center not only needs more GPUs but a stronger host CPU layer that can keep accelerators, memory, networking and software agents synchronized. Our preferred exposure is unchanged across CPUs, DRAM [dynamic random access memory], NAND/eSSD [flash memory/enterprise solid state drive], HDD [hard disk drive], ABF substrates [specialized insulating material used for semiconductor chips], foundry, memory interface, BMC [specialized motherboard chip], sockets/connectors and semi-cap, where content growth and supply constraints capture the ‘second leg’ of the AI infrastructure cycle … Building an Agentic AI system does not mean putting a few more CPUs next to the same GPU-heavy rack design. It is a much more complex structural shift in data center architecture by adding a newly engineered CPU compute layer … AMD’s 1Q26 call is the strongest CPU validation. Management now expects the server CPU TAM [total addressable market] to grow more than 35 per cent annually to more than $120-billion by 2030, up from its prior 18-per-cent CAGR framing, explicitly citing agentic AI as a driver of CPU compute for orchestration, data movement and parallel execution … Arm reported record Q4 FYE26 revenue of $1.49-billion and full-year revenue of $4.92-billion, while data center royalties more than doubled year-over-year. More importantly, customer demand for the new Arm AGI CPU is now more than $2-billion across FYE27-28, more than double what was indicated at Arm Everywhere”.

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Diversion

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