This year has begun with an ironic twist: the unpredictable and inconsistent rollout of the MAGA economic agenda has left investors unsettled. Nowhere has this been more evident than in the United States, where the S&P 500 briefly dipped into correction territory, falling 10%. Meanwhile, major equity indices worldwide have outperformed the S&P 500, with most remaining in positive territory year-to-date.
Notably, Brian Madden is the chief investment officer of First Avenue Investment Counsel.
Top 3 Stock Picks
1. Alimentation Couche-Tard (TSX: ATD)
Alimentation Couche-Tard is the world’s second-largest convenience store operator, boasting nearly 14,500 locations across Canada, the U.S., Europe, and Hong Kong. The company has delivered consistent financial performance, generating a return on equity (ROE) just under 20% and growing earnings per share (EPS) at a 12% compounded annual rate over the past decade.
Couche-Tard leverages its procurement scale to offer competitive fuel pricing, driving traffic to its stores, where merchandise gross margins are three to four times higher than fuel profit margins. The company has a proven track record of successful acquisitions, extracting significant synergies from newly acquired businesses.
Currently, Couche-Tard is in friendly pursuit of its largest acquisition yet—Japan’s 7&I Holdings, the parent company of the globally recognized 7-Eleven chain. Trading at 16 times forward earnings, Couche-Tard offers a compelling blend of value and growth.
2. Vistra (NYSE: VST)
Vistra is a leading independent power producer, supplying electricity to five million customers across 20 U.S. states, including 15 deregulated markets. With half its power generation capacity located in Texas, Vistra is well-positioned to benefit from the surging electricity demand from data centers.
Additionally, Vistra’s low-carbon profile strengthens its investment appeal—it is the second-largest nuclear power operator in the U.S. Several catalysts could drive the stock higher, including:
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Potential power offtake agreements with data center operators
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Rising power prices due to tight supply-demand conditions
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A credit rating upgrade from BB+
After a recent pullback, Vistra is trading at an enterprise value-to-EBITDA multiple of 10.3x, a 10% discount compared to its slower-growing utility peers. This presents an attractive entry point.
3. KKR (NYSE: KKR)
KKR is a leading player in the alternative investment sector, with assets under management (AUM) growing at an 18% annual rate to reach $640 billion since its 2010 IPO.
The firm’s strong balance sheet and A-rated credit profile enable it to invest alongside third-party investors, aligning its interests with shareholders. KKR’s recent acquisition of Global Atlantic, a life insurance and annuity business, adds stability by balancing out the volatility of its private markets investments.
In addition, KKR’s rapidly expanding capital markets business boosts recurring management fee revenue. While succession planning began four years ago with the appointment of two co-CEOs, founders Henry Kravis and George Roberts still maintain 10% ownership stakes valued at $10 billion each.
Private markets offer greater opportunities for mispricing than public markets, allowing well-resourced investment teams to generate high returns and justify premium management fees plus carry (profit-sharing). The sector has seen significant institutional and private client fund inflows for decades, outpacing public market investments.
After a 40% drawdown since January, KKR stock now presents a compelling buying opportunity, having delivered a staggering 1,800% total return since its IPO.
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