Household wealth data for Q2 showed the lower income group’s reliance on transfer payments (EI, OAS, CPP, etc.) - unsurprising given the employment picture. The divergence in investment income is worth noting though…

… driven by the difference in portfolio make up between income bands. While the lowest income group has nearly half of its assets in real estate, which is losing value for the first time in a long time...

… the highest income group has greater exposure to equity markets, more than offsetting the soft housing backdrop.

Mix in sluggish wage growth and you get the largest gap in wealth on record, up nearly 30% since 2022.

Yesterday night Linamar (LNR) announced its $300M acquisition of part of Aludyne’s North American operations, adding more scale to its mobility business…

… and to its U.S. manufacturing presence, which is without a doubt a strategic focus for management given the trade backdrop.

Last year, the company highlighted a growing pipeline of opportunities due to financial stress in the industry…

… which has resulted in more than $225M of work taken over in the past 8-12 months. But with leverage sitting well under target…

… and a lot of cash on the sidelines, we might get more takeouts in the future.

Speaking of distress in the automotive sector, we’ve got another billion dollar blow up - with parts supplier First Brands Group making over $2B disappear just days after Tricolor’s loan fraud was revealed. Given the absurd corporate structure…

… it’s not a complete shock, and it’s not the CEO’s first rodeo either - having been sued by creditors for fraud in the past. One can imagine he knows how to find a willing counterparty…

… but this bomb has at least 30 major creditors involved - including Jefferies, UBS, and other familiar faces. That’s prompted some debate over contagion risk, but with Canadian banks holding just 1-2% of their books in the auto sector… unlikely.

Richelieu Hardware (RCH) gained 4% on its Q3 print, which beat estimates thanks to a return to organic growth in Canada…

… and the first Y/Y improvement in EBITDA margins in over three years.

Importantly, management views the recent tariffs on furniture and cabinets as an opportunity - with its U.S. footprint set up well for a reshoring of supply chains.

Combined with the potential for Build Canada Homes to boost the Canadian business and a margin-accretive M&A pipeline ($75M of revenue bought YTD)…

… RCH could get a re-rate soon.

Firan Technology Group (FTG) shed 8% after missing both top and bottom-line estimates in Q3 - with revenue growth decelerating to ~10%…

… driven mainly by the transition of some of its operations from Toronto to China - a shift that weighed on margins and is likely to impact Q4 numbers.

Up over 40% since we talked about it in January, what appears to be a generational defense setup has driven FTG’s multiple to a premium - they’ll need to execute through these near-term challenges to keep it.

Watch Aritzia (ATZ) tomorrow, as it’s likely trading higher on the back of a huge Q2 - blowing past estimates thanks to continued U.S. acceleration.

The ~8% revenue beat translated to EBITDA ~25% ahead of estimates, and with management laser-focused on growth south of the border…

… there’s a lot of runway from here.

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