Nearly a year ago, Bank of America (BofA) Securities quantitative strategist Ohsung Kwon presented a bullish case for Canadian stocks based on rising commodity prices and inexpensive valuations.

Now, he’s doubling down on that call saying the catalysts for TSX stocks are even stronger, citing a “New Energy World Order”.

Here are the hi-lights of Kwon’s report entitled A New Regime: Buy Canada, followed by 25 of what he believes are the most attractive stocks based on free cash flow to enterprise value (market cap plus debt).


“A New Energy World Order (NEWO) is in play.

Canada is a developed commodity player poised to benefit from the new regime.

In June 2021, we highlighted a bull case for Canadian stocks (TSX 60) amid rising commodity prices and inexpensive valuations.

Today, we believe the tailwind is even stronger and remain bullish on the TSX.

Canada exports what’s scarce in the current environment. It is the fourth largest net exporter of crude oil (mostly to the US) and the fifth largest agriculture exporter (third for wheat).


It also produces gold, potash, aluminium, uranium, coal, lead, zinc, etc., most of which are in shortage.

Higher commodity prices mean more growth for Canada (but also more inflation).

Our economists expect Canada to see among the strongest GDP growth (+4.2% in 2022 and +3.1% in 2023), well above +3.3% and +1.8% in the U.S., respectively.

Our Banks analysts are bullish on Canadian Banks amid rising rates, with the policy rate expected to reach 3.5% (current 1.0%) by mid-2023 (two 50 basis point hikes followed by six 25 basis point hikes).

Equity markets are assigning a record discount to the TSX 60 relative to the S&P 500.


We expect the valuation gap to narrow.”

  • Imperial Oil Ltd.
  • Suncor Energy Inc.
  • Canadian Natural Resources Ltd.
  • George Weston Ltd.
  • Loblaw Companies Ltd.
  • Magna International Inc.
  • Canadian Tire Corp.
  • Gildan Activewear Inc.
  • Cenovus Energy Inc.
  • First Quantum Minerals Ltd.
  • Pembina Pipeline Corp.
  • Barrick Gold Corp.
  • Open Text Corp.
  • CCL Industries Inc.
  • Shaw Communications Inc.
  • Metro Inc.
  • Alimentation Couche-Tard Inc.
  • Dollarama Inc.
  • Constellation Software Inc.
  • Canadian Apartment Properties REIT
  • BCE Inc.
  • Canadian National Railway Co.
  • Nutrien Ltd.
  • Agnico Eagle Mines Ltd.
  • Cameco Corp.


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