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The Smartest People on Wall Street Own These 3 Canadian Stocks: Should You?

If you’re like most investors, you probably have a home-field bias. Investors tend to buy what they know, and most people know their country’s companies better than foreign ones. As a result, many investors’ portfolios are heavily weighted toward their country of origin. Whether that’s a good thing or not is debatable. By investing in exclusively in your own country, you miss out on geographic diversification. However, you also spare yourself the headache of having to factor exchange rates into your decisions.

If you want to geographically diversify your portfolio, that’s probably a good thing. However, if you prefer to stick to Canadian stocks, you have no shortage of good options to choose from. There are many top TSX stocks that are staples of institutional investors’ portfolios right now. The following are just three of them.

Canadian National Railway

Canadian National Railway (TSX:CNR)(NYSE:CNI) is Canada’s largest railway. It ships freight across Canada and as far south as New Orleans, mainly carrying oil, coal, and grain. Owing to its three-coast service network, it has a competitive advantage in long-distance shipping. It’s also working to expand its presence in intermodal. Like all railways, it enjoys competitive protection from the high barriers to entry in its niche.

CNR is owned by many well-regarded investment companies, including Bill Gates’s Cascade Investment (managed by Michael Larson).

Restaurant Brands International

Restaurant Brands International (TSX:QSR)(NYSE:QSR) is Canada’s largest restaurant company, formed by the merger of Burger King and Tim Hortons. Since the merger, the company has gone on to acquire Popeyes Louisiana Kitchen as well.

Burger King and Popeyes are both solid assets for Restaurant Brands, growing sales at 8.2% and 6.8% year over year, respectively. Tim Hortons is not doing as well as the other two but is still growing (if only slightly).

Earlier this year, Restaurant Brands increased its dividend by over 100%, resulting in a big payout to shareholders who’d held at that time.

The company’s stock is owned by both Bill Ackman and Warren Buffett.


Shopify (TSX:SHOP)(NYSE:SHOP) is Canada’s hottest tech stock. Up 125% this year, it’s one of the big TSX winners of 2019. Shopify runs a unique e-commerce platform that manages payment processing and analytics for its customers. The company has also added some advertising features to help vendors drive traffic to their businesses.

Because Shopify lets vendors run their own online stores, it has become popular with brand-conscious businesses, including celebrity brands and fashion companies. Evidently, the company is doing something right, as it grew revenue by 50% and adjusted net income by 150% in its most recent quarter.

Shopify stock enjoys robust institutional backing. It is owned by a number of top Wall Street firms, including Morgan Stanley and several of Fidelity Investments’s mutual funds.

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Fool contributor Andrew Button owns shares of Canadian National Railway. David Gardner owns shares of Canadian National Railway. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of Canadian National Railway, RESTAURANT BRANDS INTERNATIONAL INC, Shopify, and Shopify and has the following options: short October 2019 $82 calls on Restaurant Brands International. Canadian National Railway and Shopify are recommendations of Stock Advisor Canada.

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