NCP's "top 10" investing ideas for 2H 2024

At the time of writing, our portfolio in the 1H is up ~19% year to date thanks largely in part to a convincing precious metals rally. Our biggest laggards have been real estate stocks which are mostly flat on the year minus the reliable dividends. A couple good trades on Cenovus and Tourmaline have been helpful after Q4’s sell-offs, but we have closed out both positions although would be happy to re-enter if they hit our targets.

As we approach 2H 2024, we are already thinking ahead. While we are neutral on energy, we remain long our two top ideas which are Strathcona & Total Energy Services and expect both names to continue to win with minimal downside risk. We have smaller energy positions in a few other names with non-material positions. Canadian energy has plenty to look forward to, but we think much of it has been priced in, particularly amongst the better known oilsands & Montney names.

Our guess is that US inflation continues to fall gradually throughout the summer which will cause central banks such as the Fed to begin cutting rates. We think it’s likely that Canada and Europe begin their official cut cycles in June, which could act as a catalyst for real estate stocks and other rate sensitives such as utilities or telecoms, both of which are also severely lagging the broader market.