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EPS of $1.54 beat estimates of $1.33; revenue of $4.67B beat estimates by just under 1%. Arch's underlying loss ratio may deteriorate this year, but remain solid. Still, 1Q margins were better than consensus in insurance and reinsurance, potentially leading to improved annual estimates. Underwriting income should worsen in 2025 on waning price increases, yet premium growth and still-expanding investment income remain earnings tailwinds. Even a higher underlying loss ratio in 2025 would likely yield a midteens return on equity, not much better than other Bermuda carriers, despite Arch's premium valuation. Continued consolidated favorable P&C reserve development was a positive and beat consensus. Catastrophes, including preannounced wildfire losses, were a bit better than expected (but certainly the company was impacted). EPS beat consensus, as catastrophe losses were lower and reserve development was higher than expected.
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WCN continues to chug along nicely. Valuation is high at 36X earnings now, but investors are willing to pay up for reliability. Growth has been very steady and decent growth is very much expected over the next two years. The balance sheet is somewhat levered but cash flow can support it. The stock has been solid, up 371% in the past decade. The Q1 was good and the company noted business trends were stable. We would be comfortable owning this.
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Market Update:

2025 has been a roller-coaster year, starting with the surprisingly forward move from the U.S.’s new administration, led by President Trump, that announced meaningful tariffs with various trading partners. This policy led to a meaningful decline across indices, along with tremendous uncertainty regarding the future outcome of the trade war and how this would affect the economy and companies’ earnings. 

As of mid-May, the heat between the U.S. and China seems to have slightly tempered, which led to a market rally across sectors, especially in the large-cap sector, which in some cases has quickly and fully recovered the losses from April. The astronomical tariff numbers that were as high as 145%, made the market turn to panic sell-off mode, are now looking more like negotiating tactics between countries. Although there is still uncertainty regarding the trade war, the trade negotiations are progressing positively, and we think the worst is probably behind us.

Historically, small-cap stocks tend to be the hardest hit and also may take some time to recover. In the current environment of an early recovery, we think investors can still find many high-quality Canadian small-cap names with solid fundamentals in terms of growth prospects and returns on equity, and yet are trading at an attractive discount relative to US peers. With this macro backdrop of easing trade war and a pending interest rate cut from central banks, we think small-caps in general would have room to run to narrow the discount in valuation compared to large-caps in general.
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They have huge oncology franchise, but face a huge patent cliff. But they have a some promising drugs. He owns this partly for the 5.6% dividend. He took shares off the table when the stock spiked earlier this year, but at current levels, he's watching the price go lower before buying again.

Has no patent cliff. They have great franchises in oncology, immunology and others. Shares are down because bond yields are rising. Dividend pays only 3.7%, below interest rates. That said, good to start a position now given their drugs, including Botox.

Has a triple-A balance sheet and many drugs in the pipeline. But it pays only a 3.55% dividend, below interest rates, and still suffers the legal overhang of its talcum powder allegedly caused ovarian cancer.

It has one of the greatest consumer product lines in the world. A dividend aristocrat that has raised its dividend for 70 years. It yields only a 2.68% dividend yield, falling short of current interest rates and bond yields.

It has amazing pet food and toothpaste businesses, but pays only a 2.37% dividend yield, far below current bond yields. Could go even lower.

An amazing company and major soft drinks maker. Shares are far from its last highs, so low that the dividend now pays 4.42%. Suppose RFK Jr. goes after companies that produce caloric snacks? Share are very undervalued, but who knows when shares will stop going down?

They make hugely popular cereals, very sugary, and so they could be a target of RFK Jr.'s health department. It yields 4.5%, the same as the 10-year T-bond, but that's still not enough to offset regulatory risk.

The dividend is nearly 3% and trades only at 16x PE. Could start a position now.

It got hit when the AI trade went out of style and after tariffs, but has rallied 20% in the last month. Also, they just delivered a strong beat and raise quarter.

Is one of the most popular websites in the world. Is -44% from its February peak and a buying opportunity today. Soared 11% today. A wild, volatile stock though. Two weeks, they reported a stunning quarter with top and bottom line beats. They're growing fast and keeping costs down, so that means profits. Despite market worries over digital ads, Reddit execs offered strong guidance in earnings and revenues. And yet shares sank after that report; the sellers were wrong. Some analysts feared growth was slowing, even though numbers were good. Also, company guidance was cautious in its user forecast due to changes in Google's search algorithm; Reddit depends on Google to drive traffic. However, active advertisers grew 50% YOY, including in pharma, autos, telcos and financials. This puts to rest fears of Reddit unable to monetize its user base; 40% of Reddit chats are commercial in nature. In AI, Reddit has entered contracts with OpenAI and such to give access to Reddit's data API that will offer a AI a huge archive of Reddit's user-generated discussions; this will help train and improve AI. However, shares trade at a high 54x 2026 PE, though earnings are suppose to grow 85% in 2026. Buy Reddit here, but it is volatile.

Their accounting problems are long enough behind them, and SMCI is cheap compared to its peers.

Two weeks ago they delivered a great quarter: double-digit earnings growth and raised full-year earnings forecast, though missed earnings. Shares jumped to new highs, but then Trump announced he would slash drug prices (he needs Congress to approve). Likes them. They offer value-added services and are not merely drug distributors, but there are better sectors to invest in.