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First Brexit… then Trump… Now, it’s time for Pro

Is your portfolio really prepared for what’s coming next?

To help investors like you navigate this historically uncertain — yet high-flying — market and prepare for an inevitable downturn, we’re re-opening our Motley Fool Pro Canada service to a select few new members for a short time.

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Caisse de Dépôt Likes These 3 Stocks: Should You?

Caisse de dépôt et placement du Québec announced June 20 that it was buying two million subordinate voting shares of Montréal-based Stingray Digital Group Inc. (TSX:RAY.A)(TSX:RAY.B) for $14.2 million. It’s not a big investment by the pension fund manager’s standards—it manages $248 billion in assets for pension funds in Québec. The move increased its ownership stake in the digital music and video service by more than 500%, suggesting that now is the time to buy its stock.

Montréal-based Stingray delivered outstanding fourth-quarter and fiscal 2016 results.

Revenues in its fourth quarter increased 31% to $25.7 million, while generating adjusted EBITDA of $8.2 million, a 6.3% increase over Q1 2015. On the year, Stingray’s revenues increased 27% to a record $89.9 million and an adjusted EBITDA of $31.0 million, which is also a record. The best part of its results are its recurring revenues, which increased 22.1% in fiscal 2016 to $77.6 million, or 86% of its overall revenue.

Businesses kill for this kind of consistent revenue generation. Investors seek out companies like this because they’re a delight to own. That’s why Caisse upped its stake. However, most investors will probably shy away from Stingray because of its size. If you can look beyond its tiny market cap of less than $300 million, Caisse’s endorsement is meaningful.

Who else does Caisse like that’s based in Québec? Two large caps come to mind.

The first is Alimentation Couche-Tard Inc. (TSX:ATD.B). Caisse owns almost 27 million shares in the convenience store operator. Those holdings are currently valued at $1.4 billion–one of the few investments among the hundreds of holdings listed in its 2015 annual report over the billion-dollar mark.

Why do they like it?

Probably for the same reasons I do. It knows how to buy, integrate, and operate convenience stores in all parts of the world. More importantly, it’s one of the best at quickly deleveraging after big M&A deals, and that’s a big plus for investors concerned about debt. Alain Bouchard and the rest of the team in Montreal know how to operate this particular type of business better than almost anyone on the planet.

Recently, I wrote an article about how its stock is down year-to-date and quite possibly headed for its first annual decline since 2008, but its ability to integrate acquisitions, along with its move to one brand—Circle K—around the world should provide it with even more synergies than it already possesses. While down, it’s definitely not out.

The other large cap Caisse likes is CGI Group, Inc. (TSX:GIB.A)(NYSE:GIB), a $16 billion company that plies its trade in the highly competitive IT field. Critically important is the fact CGI also happens to be the pension fund manager’s biggest holding at $3.2 billion. That’s an endorsement of the Montréal-based company because the next largest position is around $1.8 billion, or almost half CGI.

I don’t know a lot about CGI, which should indicate my level of ignorance when it comes to technology stocks.

However, Fool contributor Karen Thomas does. Recently, Thomas highlighted three good reasons to buy CGI’s stock. She feels the company has barely scratched the surface in Asia, where its second-quarter revenue increased by 11.6%. With Asia accounting for just 5% of the company’s overall revenue in Q2, investors can expect to hear more from this segment of its business.

Add to this improving margins, organic growth, a bigger backlog and a strong outlook for the rest of fiscal 2016, and it looks as though Caisse will be richly rewarded for its heavy weighting in CGI.

These are but three of the stocks Caisse likes. Have a look at its 2015 annual report to find more gems in their massive portfolio.

Stock buy alert hits astounding 96% success rate!

The hand-picked investing team inside Stock Advisor Canada, recently issued a buy alert for one special type of "bread-and-butter" stock where The Motley Fool U.S. has banked profits on 23 out of 24 recommendations. Frankly, with an astounding 96% success rate that has delivered average returns of 260%, chances are this new pick could deliver life-changing returns as well. Because the team at Stock Advisor Canada fully embraces the same time-tested investing philosophies that have led to countless Motley Fool winners globally. So simply  click here to unlock the full details behind this new recommendation and join Stock Advisor Canada.

*96% accuracy includes restaurant stock recommendations from Motley Fool U.S. services Stock Advisor, Rule Breakers, Hidden Gems, Income Investor and Inside Value since each services inception. Returns as of 5/27/16.

Fool contributor Will Ashworth has no position in any stocks mentioned. CGI and Couche-Tard are recommendations of Stock Advisor Canada.

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

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