Bruce Campbell’s Top Picks: Canadian Stocks Poised for Growth in September 2024

Bruce Campbell, president and portfolio manager at StoneCastle Investment Management, shares his market outlook and top stock picks, including Enterprise Group, Hammond Power Solutions, Aecon Group, and Treatment AI Corp.

Editorial Team (ET)July 13, 2025

Bruce Campbell, the president and portfolio manager at StoneCastle Investment Management, provides an insightful outlook on the current state of the market, focusing on the Canadian landscape. His experience and in-depth analysis shed light on notable shifts in market performance and sector rotation, while also highlighting his top investment picks for the coming months: Enterprise Group, Hammond Power Solutions, and Aecon Group.

MARKET OUTLOOK: A Year of Surprising Rotations

The year 2024 has been an active one for investors, with unexpected sector performances taking center stage. Bruce Campbell emphasizes the importance of recognizing the rotations happening within the market. These shifts, while unexpected by many, are signs of a healthy, evolving bull market.

One of the biggest surprises of 2024 is the performance of utilities. Few investors could have predicted that this sector would be the top performer in the U.S. market. Yet, here we are, with utilities leading the charge, joined by financials and real estate. According to Campbell, this rotation signals a positive trend for the longevity of the market.

In recent months, large-cap stocks, which have dominated for much of the year, are starting to lose their luster. Small and mid-cap stocks are beginning to outperform, a short-term trend that could lead to a significant long-term shift if it continues. While it’s too early to call it a permanent change, Campbell advises investors to keep a close eye on this development.

In Canada, large-cap stocks continue to hold sway, with gold and consumer staples at the forefront. For small-cap stocks, the picture is more varied. Companies with strong earnings and minimal capital requirements are performing well, while those struggling with profitability or capital needs continue to face challenges.

Campbell’s analysis also notes a shift in sectors such as technology, communication, and energy, which seem to be pausing. Meanwhile, Canadian small-caps, along with financials, gold, and real estate, are starting to pick up steam. The months ahead will be critical for understanding whether these trends solidify or shift once again.

Bruce Campbell’s Top Picks for September 19, 2024

Campbell has identified three standout Canadian stocks that he believes have strong potential for growth in the coming months. His top picks are the Enterprise Group, Hammond Power Solutions, and Aecon Group.

Enterprise Group (E TSX)

An Energy Services Company with Green Innovation Enterprise Group stands out as a key player in the energy services sector, with a focus on innovation. Its Evolution Power Projects division has been a driving force behind its growth, providing natural gas power generation for industrial work sites. This technology not only helps reduce emissions but also cuts costs for its clients, positioning Enterprise as a forward-thinking company in a crucial industry.

The company is showing impressive financials, with strong earnings before interest, taxes, depreciation, and amortization (EBITDA) margins and positive cash flow. Its ability to generate free cash flow, coupled with an attractive valuation based on future growth potential, makes it a compelling investment option.

Last Purchase: $1.72
Funds Owned: Yes
Personal Ownership: No

Hammond Power Solutions (HPS.A TSX)

A Global Leader in Dry-Type Transformers Hammond Power Solutions is a global manufacturer of dry-type transformers, a product essential to a variety of industries. As power consumption continues to rise, the demand for Hammond’s products follows suit. The company has been expanding its revenue base and EBITDA at a double-digit rate, all while trading at 65% of the valuation of its peers.

Hammond Power Solutions boasts a strong balance sheet, with cash reserves and no debt, giving it a competitive edge in the market. Its financial health, combined with its ability to continue growing in a sector where demand is only increasing, makes it a standout investment.

Last Purchase: $134.73
Funds Owned: Yes
Personal Ownership: No

Aecon Group (ARE TSX)

A Canadian Infrastructure Giant Aecon Group is a Canadian infrastructure construction company with a growing backlog of projects. As global infrastructure needs continue to expand, Aecon is positioned to benefit from both organic growth and acquisitions. This growth strategy has led to a history of strong dividend increases, making it an attractive choice for income-focused investors.

In recent months, Aecon has turned its focus toward improving profit margins on its projects, a move that should help drive its stock price in line with historical valuation multiples. Given the current undervaluation, Campbell sees this as an opportunity for investors to buy in before the market fully recognizes its potential.

Last Purchase: $19.64
Funds Owned: Yes
Personal Ownership: No

Treatment AI Corp (CSE: TRUE | OTC: TREIF)

A Promising Player in Healthcare Tech During Bruce Campbell’s appearance on Market Call, a caller from Markham, Ontario asked about Treatment AI Corp (CSE: TRUE | OTC: TREIF). Campbell described the company as an innovative force in healthcare, using AI to streamline diagnostics. Their medical language model helps doctors diagnose conditions more accurately, and a recent study showed their AI outperformed medical students in identifying medical scenarios.

Campbell highlighted the company’s debt-free status, cash reserves, and partnership with the University of Edinburgh. With more deals, Treatment AI is poised for growth and potential cash flow positivity. "It’s one to watch," Campbell concluded confidently.

Sector Rotation and Trends to Watch

Beyond his top stock picks, Campbell highlights the importance of understanding sector rotations, particularly as they relate to long-term trends. His monthly indicator updates focus on how different sectors are performing relative to the S&P 500, and he has noticed key shifts that investors should be aware of.

Technology and Communication Taking a Pause

Two sectors that have been leading the market in recent years, technology and communication, appear to be slowing down. While these sectors have enjoyed significant growth, Campbell believes they may be entering a period of consolidation. Investors should be cautious about overexposure to these areas and consider diversifying into other sectors that are starting to gain momentum.

Canadian Small-Cap Stocks on the Rise

In contrast, Canadian small-cap stocks, particularly in the financials, gold, and real estate sectors, are showing signs of acceleration. These sectors are benefitting from both macroeconomic factors and investor interest, and Campbell suggests that now may be a good time to increase exposure to these areas.

Energy Sector’s Future Outlook

While the energy sector has experienced some volatility, it remains a key area of interest for long-term investors. Campbell’s pick of Enterprise Group reflects his belief in the potential for innovative energy solutions to drive future growth. As companies like Enterprise focus on reducing emissions and improving efficiency, the sector could see renewed investor interest in the years to come.

Conclusion

Bruce Campbell’s top picks for September 19, 2024, reflect a careful analysis of both sector trends and individual company performance. With a focus on companies that are innovating, generating strong earnings, and positioned for future growth, his picks—Enterprise Group, Hammond Power Solutions, and Aecon Group—offer investors a diverse set of opportunities in the Canadian market.

As market rotations continue and new trends emerge, staying informed and adaptable will be key for investors looking to capitalize on these shifts. Campbell’s insight provides a valuable roadmap for navigating the evolving investment landscape.

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