I thought it would be interesting to look at three Canadian stocks via the perspective of how well their management teams are guiding these companies through the current uncertain macro environment. There’s plenty to be said about each of these stocks’ underlying fundamentals and business models. But leadership is important, and it’s something I’d argue gets overlooked.
I’ve picked three top Canadian stocks with solid leadership I think can result in continued gains for investors. Here’s why these three companies look like buys based on the quality of their CEOs and leadership teams.
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Shopify
Perhaps the most well-known Canadian growth stock in the market, Shopify (TSX: SHOP) deserves a look for a number of key reasons.
I’d argue there’s plenty to like about the company’s structural growth catalysts stemming from e-commerce growth relative to bricks and mortar retail. But the company’s CEO Tobi Lutke is among the best in this sector, and is notably one CEO who has decided to keep the company’s head office in Canada rather than pursuing more capital south of the border.
From day one, Lutke was instrumental in not only developing the scalable cloud infrastructure and seamless digital payments integrations which support Shopify’s core e-commerce platform. This is a CEO who is forward-looking, investing strategically in key innovative technologies (ahem, AI) to bolster earnings moving forward.
Those looking for a blue-chip Canadian growth stock with solid leadership don’t need to look far. Buying the largest company in the TSX is the simplest way to go.
Lululemon
Another built-in-Canada company that has since chosen to list only on the Nasdaq is Lululemon (NASDAQ: LULU).
Shares of the formerly Vancouver-based company have been on a significant downtrend, as investors look past physical retailers to companies like Shopify, heading up this article.
I think some of that view is fair. However, with a world-class management team driven by CEO Calvin McDonald, there’s a lot to like about the company’s renewed sense of operational agility and social responsibility and innovation. With the company looking to shift toward a multi-channel lifestyle brand, I’d suggest that this is a company undertaking a turnaround that may take some time.
But given the company’s solid balance sheet and cash position, I think this is a great option for long-term investors looking to pick up shares of a beaten down stock with the potential to rebound in a big way in the months and quarters to come.
Royal Bank of Canada
Royal Bank of Canada’s (TSX: RY) CEO Dave McKay could be one of the most recognizable names on Bay Street.
McKay’s strategic focus on sustainable business practices has led Royal Bank to move further up the global banking rankings. Currently a top-ten bank globally, Royal Bank’s durable business model and vertical integration across a number of business lines positions this financial institution well to battle whatever headwinds may come its way.
Part of the security investors receive in investing in a company like this is Royal Bank’s leadership team, which has erred on the side of innovation in matching quickly shifting market expectations. The bank’s long-term strategy revolves around utilizing AI to improve return on equity and other key metrics (ROE for the company came in at a whopping 17.7% this past quarter).
If McKay can do what many on Bay Street believe he can, this is a top stock to continue holding throughout this market cycle.
