Barlow’s Research Roundup: Top picks in gold mining stocks from a Scotiabank analyst as U.S dollar wobbles

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

Precious metals picks

Volatility in the U.S. dollar forecast has raised interest in gold. Scotiabank analyst Tanya Jakusconek provided top picks in the sector,

“OUR TAKE: Slightly Positive. Three key themes evident in Q2/26 are expected to continue into H2/26: (1) solid operating performance (with good cost containment) with the companies well positioned to deliver on guidance, (2) strong financial performance leading to robust FCF generation, and (3) increasing capital returns via share repurchases. With this in play, producers stand out with attractive valuations trading at 0.91 times P/NAV and FCF yields of 6.3 per cent, 6.7 times EV/EBITDA for 2027 at spot gold prices versus the streamers at 1.88 times P/NAV and 4.0-per-cemt FCF Yield, 19.2 times EV/EBITDA for 2027 respectively.

“Positioning for H2/26, given the better valuations and the larger expected capital returns (supported by solid operating performance), we prefer the operators to the streamers. Our top picks are AEM, KGC, NEM, AU and EGO”

snadian tech

RBC Capital Markets analyst Paul Treiber offered top picks in the Canadian technology sector,

“Our view: The S&P/TSX Info-tech sub-sector has rallied 33 per cent off its trough on May 13th and is now down just 6 per cent year-to-date. Despite this sharp rebound, the sub-sector’s year-to-date performance still lags the S&P/TSX Composite (+15 per cent year-to-date) and the S&P 500 Info-tech sub-sector (+18 per cent year-to-date). The rally in Canadian tech stocks since mid-May reflects improved investor sentiment for software, driven by two factors: generally healthy near-term fundamentals (11 per cent avg. organic growth, 62 per cent of our covered stocks reported Q2 revenue above consensus) and valuations near multi-year lows. While the debate regarding AI’s potential risk to software is likely to persist, sustained healthy fundamentals may continue to fuel improved sentiment. As a result, we see attractive risk-reward across our coverage, with Shopify, Constellation, Kinaxis, and Celestica as our best ideas”.

Profit forecasts improve

Global news flow feels negative but earnings forecasts are extremely positive, as BofA Securities quant strategist Nigel Tupper describes,

“In August, the Global Earnings Revision Ratio increased significantly from 0.99 to 1.35 as earnings upgrades outnumbered downgrades. The Ratio improved, and is above 1.00, in all regions. The Japan Ratio reached an all-time high (1.38 to 2.27) and the Europe Ratio (0.98 to 1.52) jumped to the seventh highest on record (data since 1988). The Ratio is near a five-year high in the USA (1.20 to 1.91), Asia Pac ex-Japan (0.90 to 1.05), and Emerging Markets (0.87 to 1.03). In the past when the Global Earnings Revision Ratio was near current levels, the MSCI AC World Index averaged 10.0 per cent in the next year. Near record highs: Tech Hardware, Diversified Financials By global sector, the Ratio is approaching a record high for Tech Hardware (1.54 to 2.49) and Diversified Financials (1.60 to 2.48), and remains high for Semiconductors (2.71 to 2.44). In general, the Ratio is higher for cyclicals than defensives with a Ratio above 1.00 for Energy (1.60), Materials (1.32), Industrials (1.45), and Media (1.07). In contrast, the Ratio is lowest for more defensive sectors, including Utilities (0.88), Telecom (0.88), and Consumer Staples (0.93)”.

Bluesky post of the day

Diversion

“Scientists Studied 338 NFL Players’ Brains After Death. Nearly All Had the Same Disease” – Gizmodo