Stock Picks for March 2025

Stock Picks for March 2025

Today is March 13th, 2025 and it’s time for some new stock picks!

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Market Overview

A lot has happened since the inauguration of Donald Trump. First, the Department of Government Efficiency was making headlines, with publishing what seemed to be excessive and unusual government spending in areas that most voters would have had no idea money was spent on. Then Mr Trump announced unprovoked and high tariffs on Chinese, Canadian and Mexican products. Then on steel and aluminum. Then retaliatory counter tariffs were announced by Canada and others. Tariffs are generally inflationary and at a time when inflation has been very high but subsiding, equity markets responded by selling off, as persistent inflation would mean higher interest rates and potentially lower growth. For the first time in many years investors are now talking about stagflation.

In my opinion, the best path to prosperity is through a free market economy. Tariffs, including counter tariffs, interfere with free markets and are frankly stupid. The fact that supposedly free market loving Republicans in the US and free market loving Conservatives in Canada are advocating retaliatory tariffs is even more stupid. It is what it is though, and as investors, we need to navigate this environment as well as we can. This means overweighting companies that are not going to be impacted too much by tariffs, if they go ahead.

NewMarket Corp

With all that in mind my first stock pick is going to be a domestic focused US company, NewMarket Corp, symbol NEU on the NYSE. NewMarket Corp is a holding company that, through its subsidiaries, manufactures and sells petroleum additives. Petroleum additives are used in lubricating oils and fuels to enhance their performance in machinery, vehicles, and other equipment.

The company has been extremely profitable with return on equity averaging over 30% in the last 10 years and it trades a reasonable valuation of about 3.6 times book value and 11.5 times earnings. This is great example of our motto of “buying good businesses at good prices”.

BCE Inc

My second stock pick is BCE Inc, the old Bell Canada, symbol BCE on the TSX. BCE provides wireless, broadband, television, and landline phone services in Canada. The stock has underperformed the markets a fair bit over the last 10 years. It is a mature company but the valuation is now such that it should make for a decent investment over the next few years. It trades at about 12.7 times forward earnings and it pays a big dividend. Additionally, with the recent sell off in technology stocks, investors may be looking for beaten down stocks to diversify their portfolio away from tech and this stock may become a beneficiary of that tend.

Progressive Corp

My third pick is Progressive Corp, symbol PGR on the NYSE. Progressive underwrites private and commercial auto insurance and specialty lines; it has almost 20 million personal auto policies in force and is one of the largest auto
insurers in the United States. This insurer is very nicely profitable generating return on equity of over 20% in many years and it trades at a price to forward earnings ratio of about 18.5 times. Not the cheapest but the price is reasonable.

Give Us a Call

As always, if you have questions about whether these stocks fit in your portfolio or if you have any other investment related questions, give us a call! 604-288-2084

Thank you!

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