The Monthly Gems by Allan Tong

This comeback story has ripped around 55% in the past 12 months compared to JP Morgan at 19% and Bank of America at 12%. It trades at a discount to book value and to peers, while its ROE is climbing. Last January, Citi reported 8% revenue growth, +35% EPS and +14% net interest income over the previous year. Growth is expected to continue. The private credit scare has hammered all U.S. banks in the last two months which opened a buying opportunity that endures, despite the recent recovery. Citi pays a robust 2.24% dividend yield. You don't need to wait for pullbacks to enter as the turnaround story continues.

When they reported their Q4 last week, same-store sales missed estimates and shares plunged nearly 8%. Are things that bad? Canadian same-store sales increased 1.5% and not the expected 2.8%, and fell 1.6% in traffic though rose 3.1% rise in basket size. Keep in mind that parts of Canada (i.e. Ontario) suffered an unusually cold January which impacted sales. Q4 sales rose 11.7%, including $234 million in sales from 402 Australian stores. EPS climbed 2.1% year-over-year, though gross margins of 45.5% paled next to 46.8% from the previous year.Meanwhile, DOL guides full-year same-stores sales at 3-4% compared to the just-reported 4.2%. A mixed bag, for sure. Further, the chain plans to open 60-70 new Canadian stores in the coming year, a $46.7 million warehouse in Calgary to support Western Canadian growth, open stores in Mexico, Peru, Colombia, El Salvador and Guatemala while converting an Australian chain to its own brand.

The street isn't impressed with this tech giant's AI offering, and shares have been punished 23.5% so far this year and lost all its gains in the past 12 months. Are we talking about Alphabet a year ago? No, it's Microsoft today. MSFT is also saddled by the SaaSpoclypse, now slowly fading. Investors are looking past the AI threat to see a company still strong in cloud with Azure's expanding revenues, up 31% in the past year and expected to rise another 40% this year. MSFT is also sitting on a mountain of cash, and continues to buyback shares and sell software subscriptions.

If you don't want to own the shiny rock itself, then consider LUG (not LUN-T). LUG is up 120% in the past year compared to the TSX's 27%. Thanks to robust free cash flows, Lundin Gold pays a safe 3.31% dividend. However, LUN currently trades at an historically high 30x PE, so the market is baking in strong performance going forward. The stock has cleanly beaten its last four quarters during which EPS rose from $0.64 in Q1 to $0.96 in Q4.

Stockchaser Michael O'Reilly has been pounding the table on this one for a while and he has a point. PSLV is the next best thing to owning actual silver. This fund holds actual silver held by the Royal Canadian Mint on behalf of the Canadian government. At least half of all silver is used for everything from solar panels, EV batteries and filters for HVACs. Because silver is the best conductor of electricity and heat, it is essential in computers and data centers. Demand for silver won't ease. Also,Sprott has a good reputation in funds and precious metals. However, PSLV is risky. It lives and dies by the price of silver, which has been a rollercoaster lately. This is too volatile for me, but could appeal to traders (not investors) who have the stomach to ride silver up and down. Bear in mind that PSLV charges a 0.57% MER.

On the last trading day of February, Netflix announced it was giving up its bid for Warner Bros. Discovery. Instantly, shares soared over 10%, and we feel there's still room to run. Netflix is the undisputed king of streamers and wins in virtually every metric, including subscriptions and revenues, which are growing double-digits. How often does a great stock trade at such low valuations? Netflix's PE was Last September 30, it was 50.08x, and was 57.06x on June 30, 2025. At midday Feb. 27, NFLX was trading at 32.73x—and that was after a 13% pop. Buy now and hold.

AI is supposed to kill software stocks like Adobe, Salesforce and ServiceNow, so why does Adobe keep beating earnings (which keep rising)? Adobe just fell below $300, levels last seen in September 2022, when it was trading at 35x PE. Now, Adobe trades at 17.8x. By the way, Adobe bounced in September 2022. The demise of software names like Adobe is premature and the selling overdone. True, the long-term impact of AI on this industry (and all others) is being played out, but Adobe already employs AI in its products with Firefly. Firefly is found in key products PhotoShop, Illustrator and Premiere Pro. From a technical perspective, Adobe shares recently bounced off the $288 level twice, so it has found support. The street targets $418. Upside is far more likely than down.

Losing the $1.8-billion contract with American telecom EchoStar set them back, but MDA still reported Q3 revenue growth of 45% year-over-year while gross profits rose 43% in that period. Nearly 75% of MDA's business comes from satellites, and this segment gained 69% in this span. More than half of MDA's $4.4-billion pipeline is in satellites. MDA plays into the prevailing theme of defence, while its cash flow is good. Already in 2026, the stock has run up over 50%, but there's still room to run with the street targeting $46.06, about $8 higher than presently. Stockchaser Trevor Rose likes it for its moat.

The credit card companies sank last month after Trump wanted to impose a 10% interest rate cap on plastic money, at least temporarily. The scare was enough to plunge Visa from $352 to $327. It fell to as low as $321, but quickly bounced $10. Investors already know that credit card companies are money-making machines. They act as toll booths, taking a fee whenever consumers tap and swipe their cards and, of course, collect those interest rates, mostly over 20%. With credit card adaptation continuing around the world, particularly India, at 7.45% CAGR (compound annual growth) to 2033, the future growth of market leader is virtually assured. Visa keeps beating earnings, as it did throughout 2025. As for the 10% cap, it's unlikely to pass in Washington, and if it did the credit card companies will certainly forbid a lot of American consumers with from obtaining a card. This will wreak havok on the U.S. economy. While it's true that the average American carries US$7,885 of credit card debt, the way to combat that is through education. Financial literacy involves another discussion, but it's something that every individual should undertake and governments and companies themselves should encourage.

BN returned 14.4% in 2025 vs. the TSX's 28.25%, but Brookfield gained nearly 125% over the past five years, far outshooting the TSX at 82%. This is one to hold for the long term. Earnings grow around 20% historically on an annual basis and should continue to do so.

Another Canadian name with reliable earnings growth at 15% projected for 2026 and a consistent track record in performance. WSP actually was down 1.75% for 2025, though was trading 18% higher throughout the summer. Over five years, WSP has returned 107%, beating the TSX at 82%. What WSP has going for it in the coming year is a strong backlog of infrastructure projects that are scattered across more than 50 countries, including Brazil, the U.S., Sweden, U.K., Poland, Saudi Arabia, South Africa, Guinea, Australia, India, South Korea and China. This diversity minimizes Trump's tariff hit.