Sell: Canadian Natural Resources Ltd. (TSE: CNQ)
We are reducing our position in CNQ by half to a 1.5% weight. Equity markets are currently pricing energy producers as if $90–$100 WTI is a permanent baseline—a significant premium to the $76 futures curve. To justify its current enterprise value and historical FCF yields, CNQ requires these elevated prices to persist indefinitely. Given that CNQ carries the highest oil-price beta within our energy group, we are proactively taking profits and reducing our sensitivity to a potential reversion in crude pricing.
Buy: Waste Connections Inc. (TSE: WCN)
We are initiating a position in Waste Connections, a high-quality, resilient compounder defined by its localized monopoly strategy. WCN offers a GDP-proof earnings profile that historically outperforms during economic downturns. Its financial stability is anchored by a non-discretionary service model where 80% of revenue is shielded by price protections and 40% is secured through exclusive, long-term municipal franchises. Furthermore, its predominantly non-unionized workforce provides a structural margin advantage over peers.
