Can gold sustain its spike?

[00:00:00] Speaker 1: And now let's look at some of the big movers on the TSX today. Some of our gainers include B2 Gold, which is up more than 20% at the moment. It posted better than expected operating performance at multiple mines, and it also received a permit from for its project in the region in Mali, and it expects to ramp up operations through the end of 2027. IM Gold is up almost 11% at the moment, and Jameson is up just under 10%. If we take a look at some of the losers on the TSX today, some of the real laggers, we'll show you those now. Extended Care is seeing the biggest intraday decline since 2020. It posted second quarter profit that missed estimates, and the quarter also saw margin pressure. So it's down almost 8% at the moment. Chartwell Retirement also down almost 3%. And Emera is down about 2% at the moment as well. As many S&P 500 companies exceeded profit and revenue expectations in this earnings season, we will look at where investment opportunities may lie instead. So let's bring in Michael DeHall, Senior Portfolio Manager at DeHall Investment Partners of Raymond James. Great to have you join us. Thanks so much. [00:01:14] Speaker 2: Hi, Lindsay. Nice to see you. [00:01:15] Speaker 1: Of course. Nice to see you as well. So a couple of earnings I want to go over. The first one is Atkins Realis. It beat estimates, but the stock is down today. Last time I checked. What are your thoughts on, what are your takeaways from Atkins and kind of what this means for the broader gold industry as well? [00:01:30] Speaker 2: Yeah, yeah. Atkins Realis, they had a great quarter. They beat, I think, 97 cents EPS versus 92 cents. And they have a pristine balance sheet. Their financial position is quite strong. Their engineering group did post stronger than expected profitability for the quarter as well. So, and we're pretty constructive with engineering and construction sector. And we do think as a Canadian economy continues to evolve, continues to show strength, this sector will continue to do well. So we do like this and we think, you know, the stock price is lower today, but it's, you know, it's a great long-term value in this stock. Gold, we do like gold. As I mentioned earlier, some of the gold companies that reported have done well, and it's actually being a tailwind today for [00:02:18] Speaker 1: the TSX. Yeah. Yeah. Sorry, I asked you about the gold industry without asking about Lundin, which is also reporting earnings. I got ahead of myself. It reported adjusted EPS a miss. The stock looks like it's down right now. It was up earlier. Your takeaways for Lundin Mining? [00:02:32] Speaker 2: Yeah. Lundin Mining, they had a mixed quarter. Their copper production was in line. It was their gold production that was lighter than expected. And operating costs were marginally higher. So, you know, it was just a slight miss on earnings. And that's what's weighing down the stock. But overall, we're constructive. When it comes to copper, we think the build out for AI, AI infrastructure, copper is one of the key things that's going into that infrastructure, all those projects. So we do like copper. And gold is more of a a safe haven. In times of uncertainty, you do have gold as more of a safe haven for investors. So Lundin Mining has best in both worlds. Copper production as well as gold. [00:03:15] Speaker 1: Yeah. You still feel gold is a safe haven? Because I know some opinions have changed in that sense, given what we've seen with gold over the last couple of months. [00:03:23] Speaker 2: Yeah. But we still think over the longer term, we do think gold will go back as a safer haven. Last couple of months, you know, with the war of the Middle East, gold hasn't performed that well. But we think that's due to more oil prices going higher. And some sovereign governments and central banks being forced to sell some of the gold reserves to kind of to backfill their reserves. Right. So but we do we are constructive on gold overall. We do think gold goes higher for towards the end of this year and into 2027. [00:03:59] Speaker 1: OK, so let's move on to talk about AI right now, because you argue the AI theme is broadening beyond semiconductors. Where do you feel the next investment opportunities really are? [00:04:08] Speaker 2: Yeah, we're seeing we actually take a step back Q2 earnings season. We had what already over 30% earnings growth. It's become the the best Q2 earnings season that we've seen in a very long time. And the markets have broadened out, not just from mega cap tech. We're seeing financials, industrials, health care, everyone participating. The AI, where we're seeing other sectors monetizing AI. And we're seeing software stocks come back to life. A few months ago, software was under pressure. And it was a semiconductor trade. Now software likes of Microsoft and some of these other names have done pretty well the last earnings season. [00:04:48] Speaker 1: And your general thoughts on the current earnings season. Let's talk a little bit more generally now. But what we've seen, it seemed as though expectations just get higher and higher every quarter. This one no different. But what do you think so far of what we've seen? [00:05:01] Speaker 2: Yeah, as I mentioned, I think it's the best earnings season. We've seen a very, very long time. And then backdrop, it's pretty constructive. You're seeing, you know, fundamentals, you know, well, pretty solid so far. Free cash flow growth, earnings growth. And we do think the stock market could continue to rise over the last few months. Tech note, mega cap tech stocks were laggards. And the broader market really pulled the S&P 500 higher. But we do think now tech stocks will continue to go higher. Cap expanding, the mega cap companies continue to increase their spend on AI and the AI build out. And even like I mentioned, software is coming back to life. And we do like software going into year end. [00:05:47] Speaker 1: And with that, let's move into some of your stock picks today, because the first one is Microsoft. Microsoft reporting pretty strong earnings, also showing that it's Azure business can really compete here. Why do you like Microsoft right now, I guess? And what are your big takeaways? [00:06:01] Speaker 2: Yeah, key takeaways, 17% revenue growth for the quarter. They reported a couple of weeks ago. Azure and cloud growth is 43% year over year growth. And their co-pilot now has over 30 million paid seats. So with Microsoft, this is an example of a company that's already monetized AI. They're seeing a return on investment on their AI spend. And as they continue to spend on AI, we do think Microsoft is well positioned to capitalize on AI. [00:06:35] Speaker 1: You also like NVIDIA, obviously a strong company so far. I believe we're still waiting. Yeah, they're reporting in a couple of weeks from now. What is it that you like about NVIDIA right now? What are you watching for? [00:06:45] Speaker 2: Yeah, NVIDIA reports at the end of this month, all the hyperscalers did increase their capex spending on AI. And NVIDIA is one of the leaders of AI infrastructure. And from a multiple perspective, NVIDIA now trades around 23, 24 times earnings. It's actually a lower multiple than Kimberly Clark or even Coca-Cola, right? And that company has, what, 65, 70% earnings growth year over year. So we think from a fundamental perspective, it's a great company. And going into the print, we do think NVIDIA could continue its run up. [00:07:22] Speaker 1: And then just lastly, quickly, Suncor is another one of your stock picks for today. It just announced some changes in its leadership. What is it that you like about Suncor? [00:07:29] Speaker 2: Yeah, Suncor is a high quality free cash flow story. It has, you know, disciplined operational efficiencies, as well as a robust stock buyback program. And it continues to provide shareholders with, you know, return to capital. And with that free, great free cash flow, we think Suncor is well positioned. Even if oil continues to go lower with the Middle East peace plan in place, we do think Suncor is strongly positioned going forward. [00:08:01] Speaker 1: Okay, well, I've got to leave it there. We're out of time. Michael DeHall, Senior Portfolio Manager at DeHall Investment Partners of Raymond James. Appreciate your time. Thanks for joining us.