Why this money manager is buying Pet Valu and selling Major Drilling

Jean-François Tardif is positioning for continued volatility and a possible recession between now and 2027, with a large book of index puts on the S&P 500 and other market indexes. He remains constructive on select names in gold, energy, health care and consumer retail, highlighting Radisson Mining Resources, Profound Medical and Pet Valu as top holdings. The article also notes solid fund performance, with JFT Strategies Fund up 15.3% over the past year and Timelo Strategic Opportunities Fund up 15.8% as of March 31.

Analysis

The core signal is not simply bearishness; it is a regime call that dispersion will stay elevated. In that environment, the highest-conviction longs are not the obvious cyclical beta names but businesses with self-funding balance sheets and idiosyncratic catalysts that can work even if index multiples compress. Gold and healthcare exposure also fit the same playbook: they provide optionality on growth downside without requiring a clean recession call to be right on timing.

The more interesting second-order effect is on mining service capacity. If drill budgets rise as expected while equity markets remain choppy, the service layer should still see pricing power before volumes fully recover, but only the better-capitalized operators can bridge the gap. That makes the sell discipline on the weaker driller sensible; the sector may be structurally attractive over several years, but the near-term P&L path will likely be lumpy and guided by capital allocation quality rather than pure commodity optimism.

On the consumer side, the pet retail name is a classic post-drawdown re-rating setup: low volatility cash generation can outperform materially once the market stops paying for growth and starts paying for durability. The risk is that this becomes a value trap if same-store sales remain flat into the next earnings cycle, because the market will punish any sign that unit growth is masking decelerating traffic. The cleaner catalyst is not macro improvement per se, but a single quarter of visible comp acceleration that forces the multiple to normalize.

The healthcare idea is the most asymmetric. A commercial-stage device with FDA clearance can still underperform for long stretches, but if adoption inflects, the revenue curve can reprice much faster than the market is currently implying. The key risk is execution, not science: reimbursement, physician workflow, and sales force penetration are the gating items, so the stock can remain cheap until evidence of repeatable utilization appears. That argues for patience, but also for watching quarterly procedure growth as the real trigger.

Key Decisions for Investors

• Buy PET.TO on weakness over the next 2-6 weeks as a mean-reversion cash-flow trade; target 15-25% upside if same-store sales inflect, with a tight stop if the next print confirms traffic deterioration.
• Maintain a tactical long in RMRDF for 6-12 months as a leveraged way to play gold/commodity resilience; pair against a broader mining beta basket to isolate takeover/resource-upside optionality from macro risk.
• Keep PROF on a staged accumulation list for 12-24 months, but only add after confirming procedure-growth traction; high upside if adoption curves steepen, but position size should stay modest given binary commercialization risk.
• Short MDI.TO on rallies or use it as a relative-value hedge against stronger drillers over the next 3-9 months; the cleaner expression is long-capacity-constrained peers vs. short the disappointment-prone operator.
• Add index downside protection via S&P 500 puts in 3-6 month tenors; this is a cheap way to monetize the manager’s recession-through-2027 view while preserving upside in the idiosyncratic longs.