Chris Thom’s Investment Playbook: Where He Sees Opportunity

Chris Thom’s Market Moves: Energy, Autos, and Steel in Focus for 2025

Editorial Team (ET)May 8, 2025

Chris Thom, CEO and portfolio manager at Moat Financial, has shared his latest market outlook and top investment picks. With a focus on North American large caps and options, Thom remains selective, favoring undervalued sectors with strong earnings potential. His latest picks—Suncor Energy (TSX: SU), General Motors (NYSE: GM), and Cleveland Cliffs (NYSE: CLF)—underscore his strategy of seeking solid financials and favorable macroeconomic tailwinds.

Market Outlook: Selective Growth Amidst Market Concentration

Thom isn’t making a sweeping market call but notes the growing concentration of the S&P 500. A handful of tech giants continue to dominate, leaving many strong-performing sectors underappreciated.

Instead of chasing overvalued momentum stocks, Thom sees opportunities in energy and industrials. Canadian energy stocks remain attractive due to their undervaluation and high earnings. Meanwhile, the auto sector, despite facing regulatory and supply chain challenges, continues to generate profits and repurchase shares at impressive rates.

Top Stock Picks

Suncor Energy (TSX: SU) – A Deeply Undervalued Energy Powerhouse

Suncor stands out as a vertically integrated energy giant. The company spans the entire oil value chain—from exploration to refining and retail. Despite its strong fundamentals, it trades at a strikingly low valuation.

One of the key drivers for Suncor is its aggressive share buyback program. Over the past three years, it has repurchased an average of 65 million shares annually—roughly 5% of its outstanding shares each year.

The upcoming Canadian federal elections could also shift the regulatory landscape in favor of energy producers, further bolstering Suncor’s growth prospects. Additionally, growing calls for energy independence from the U.S. create an appealing backdrop for Canadian oil producers.

General Motors (NYSE: GM) – Strong Earnings and Political Tailwinds

GM continues to be an underappreciated player in the auto industry. Despite ongoing challenges in the EV transition and global supply chains, the company remains highly profitable. Last year, GM generated $10.60 per share in earnings and is projected to earn between $11-$12 per share in the coming 12 months.

Beyond its financials, GM stands to benefit from geopolitical factors. The company’s manufacturing footprint is concentrated in Republican-led states, particularly Michigan—a crucial battleground in the upcoming U.S. elections. With policies likely to favor domestic manufacturing, GM could see additional government support.

Further boosting investor confidence, GM is aggressively repurchasing shares. Its current $6 billion buyback program is set to continue annually, supporting share price appreciation.

Cleveland Cliffs (NYSE: CLF) – A Dominant Player in U.S. Steel

Cleveland Cliffs is a vertically integrated steel producer with a strong foothold in both Canada and the U.S. The company owns iron ore mines, coke-making facilities, and steel mills, giving it a competitive advantage in the steel supply chain.

Last year’s acquisition of Stelco strengthened Cliffs’ position in the North American market. The company supplies a large portion of its steel to automakers, an industry that remains resilient despite economic uncertainties.

The steel sector has faced regulatory headwinds, including tariffs and trade restrictions. However, these protective measures may ultimately benefit Cleveland Cliffs by limiting competition from foreign steelmakers. While the company’s cash reserves are relatively low, analysts project financial improvements over the next year, which could drive the stock higher.

Final Thoughts

Chris Thom’s latest stock picks highlight his focus on undervalued, high-earnings sectors poised for long-term growth. While the broader market remains concentrated in tech, opportunities exist in energy, automotive, and industrial stocks with strong fundamentals.

Suncor, GM, and Cleveland Cliffs are all positioned to benefit from favorable macroeconomic shifts, regulatory changes, and aggressive share buyback programs. For investors looking beyond the overhyped tech sector, Thom’s picks offer a compelling mix of value and growth potential.

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