The Chris Blumas Trifecta: Circle K, Constellation, and Capital

Raymond James’ Chris Blumas doubles down on defensive giants with cash flow, capital, and global reach amid mounting market turmoil.

Editorial Team (ET)May 9, 2025

It’s no secret that 2025 has kicked off with turbulence. North American equity markets are staggering under the weight of unexpected and aggressive trade policy shifts, particularly out of Washington. The ripple effect is global—dragging economies toward the brink of a recession, jacking up consumer prices, and triggering a wave of job losses. Yet amid this chaos, Chris Blumas, portfolio manager at Raymond James Investment Counsel, isn’t panicking. He’s doubling down on a strategy built for resilience—staying invested, staying selective, and above all, staying calm.

Blumas sees the current environment not as a time to retreat, but as a moment to reposition. In his view, financial market volatility isn’t a reason to flee; it’s an opportunity. With a sharp eye for companies that generate positive free cash flow, maintain fortress-like balance sheets, and can weather economic headwinds without relying on external financing, Blumas is steering investors toward what he calls “self-sufficient giants.” His focus: North American large caps that can go on the offensive while others pull back.

Brookfield: A Fortress of Global Capital

At the top of Blumas’ list is Brookfield Corporation, a titan in the realm of alternative asset management and private equity. This isn’t just a Canadian story—it’s a global force with the flexibility and liquidity to act when others freeze. Brookfield holds controlling stakes in its publicly listed subsidiaries—Brookfield Asset Management (BAM), Brookfield Business Partners (BBU), Brookfield Renewable Partners (BEP), and Brookfield Infrastructure Partners (BIP)—but it’s the parent company that commands the real strategic muscle.

Brookfield's model thrives in downturns. With $160 billion in group liquidity, it’s in a prime position to capitalize on market dislocation. Whether it's distressed assets, undervalued infrastructure plays, or private market opportunities, Brookfield can deploy capital swiftly and decisively. The company’s shares are currently trading at about 12.5 times distributable earnings, offering a compelling valuation when paired with a core free cash flow yield north of six percent. For Blumas, this kind of financial firepower and operational flexibility is exactly what investors need in uncertain times.

Alimentation Couche-Tard: Global Footprint, Local Dominance

Blumas' second pick is a household name to Canadians and an increasingly influential player on the world stage: Alimentation Couche-Tard. Best known under its Circle K banner, Couche-Tard is one of the largest convenience store operators globally, with a footprint that spans North America and Europe. What makes it stand out, particularly in today's climate, is its ability to adapt—and dominate.

The U.S. market accounts for around two-thirds of Couche-Tard’s revenues and gross profits, giving it scale where it matters most. Even as the broader retail environment shifts, Couche-Tard continues to consolidate a fragmented industry. It’s weathering rising labor costs and the slow structural decline in cigarette sales through sheer operational scale and supply chain efficiency. The recent rebranding to unify its operations under the Circle K brand adds further strength to its global identity and marketing reach.

Trading at roughly 17 times forward earnings and boasting a trailing free cash flow yield over five percent, Couche-Tard represents a compelling blend of growth and defensiveness. It’s not just surviving disruption—it’s engineering its own version of it.

Constellation Software: The Silent Compounding Giant

Rounding out Blumas’ trio is Constellation Software, a name that rarely dominates headlines but quietly dominates the world of enterprise software. This is no Silicon Valley behemoth chasing moonshots. Instead, Constellation thrives by acquiring small, overlooked software companies that generate reliable, recurring revenues.

The company’s decentralized operating model is its secret weapon. Six operating groups function almost autonomously, each following a capital allocation framework designed to fuel hundreds of acquisitions across dozens of verticals. This isn’t about scale for scale’s sake—it’s about steady, methodical growth. Over the past three years, Constellation has compounded its cash flow per share at an impressive 19 percent annually.

Nearly 90 percent of Constellation’s revenues now come from outside Canada, underscoring its global reach. Though its valuation is steep—shares currently trade at 32 times trailing cash flows—it’s a price investors are willing to pay for consistent, above-market returns. The free cash flow yield of around two percent may seem modest, but the company's ability to reinvest that cash flow into high-return acquisitions makes it a true compounding machine.

Why Patience Beats Panic

Despite the negative headlines and the red screens, Blumas is holding steady. The case he makes is rooted in data and discipline. Investors who stay invested through downturns typically outperform those who try to time the market. That’s especially true when holding companies with fortress-like fundamentals—free cash flow, strong balance sheets, and management teams that know how to deploy capital when others are retreating.

Blumas isn’t suggesting blind optimism. He’s recommending strategic defense through quality. Diversification remains key, but it’s not about owning everything—it’s about owning the right things. In a market where capital is getting more expensive, companies that don’t need to beg for it are poised to win. His three picks—Brookfield, Couche-Tard, and Constellation—each exemplify that philosophy in their own way.

Brookfield offers global reach and liquidity. Couche-Tard brings retail resilience and operating leverage. Constellation delivers precision growth and capital discipline. Together, they form a formidable trio for investors looking to weather the storm and emerge stronger on the other side.

Conclusion: Positioning for Power in a Shifting Market

Chris Blumas’ top picks aren’t flashy bets. They’re calculated plays on predictability, adaptability, and strength. In a world gripped by volatility, his approach is a reminder that calm analysis, not emotional reaction, is what builds wealth over time.

As the geopolitical and macroeconomic chessboard continues to shift, Blumas' message rings clear: own companies that can play offense when others are forced to play defense. Stay diversified, stay invested, and focus on quality. That’s how you win in 2025—and beyond.

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