This money manager used the April downturn to buy defensive stocks

Globe and Mail

09-05-2025

Money manager Kevin Burkett has been using the recent market downturn to pick up a few stocks he thinks will not only weather the current economic storm but also become long-term winners in his clients' portfolios.
'We look for companies that not only generate sustainable returns on capital, but also have competitive advantages that allow them to thrive across market cycles,' says Mr. Burkett, partner and portfolio manager at Victoria-based Burkett Asset Management Ltd., which oversees about $430-million in assets.
His team became more defensive last fall, increasing its fixed-income holdings. In recent weeks, as the tariff war started to roil markets and valuations came down, Mr. Burkett and his team started to increase equities holdings, buying defensive stocks in sectors such as utilities and consumer staples.
The firm's balanced portfolio, which includes an approximately 60-40 split of stocks and bonds, was up 9.3 per cent over the past 12 months. Its three-year annualized return was 8.2 per cent, while its five-year annualized return was 11.4 per cent. The performance is based on total returns, gross of fees as of March 31. (Fees range from 0.40 per cent to 1.25 per cent depending on the size of a client's portfolio.)
The Globe spoke with Mr. Burkett recently about what he's been buying and selling:
Name three stocks you own today and why.
Stella Jones Inc. SJT-T, the Montreal-based manufacturer of pressure-treated wood products such as utility poles and railway ties, is a company we bought in late April at an average price of $67.11 a share.
We like that its customers, such as railways, telecom and electrical companies, are stable businesses largely independent of economic swings. This is a business we've owned before, but sold in the middle of 2023 after a strong run-up. It's an example of a solid company we've decided to buy back, given its recent drop.
Enbridge Inc. ENB-T, the Calgary-based pipeline company, is a stock we bought in late February for $61.24 a share. We tend to trade between Enbridge and Pembina Pipeline Corp. We think Enbridge is best positioned to deliver stable growth through the current business cycle. It operates long-term, fee-based contracts, which lowers cash flow sensitivity to commodity price fluctuations.
When you think about the impact of energy tariffs, it comes mostly at the cost of the shipper, so we don't see exposure in pipelines to tariffs on cross-border energy flows. That's a nice feature, too: Enbridge's footprint across North America offers a competitive advantage.
Bunzl PLC BZLFY, is a British company that sells food packaging, personal protection and safety equipment to customers across industries such as health care, construction, supermarkets, retail and offices.
It has an extensive North American business as well. We originally bought it in late December and again in April. Our average cost is $20.05 a share. It's a stable, conservative business and a great defensive company in a macroeconomic backdrop like we're in now.
Name a stock you sold recently.
Andlauer Healthcare Group Inc. AND-T, a logistics company in the health care industry, is a stock we sold after it recently announced it was being taken over by United Parcel Service Inc. UPS-N for $55 a share.
We bought the stock in February and March for an average price of $43.50 a share. We liked that it had a stable customer base in the health care field. It's also defensive, given the aging population, increased retail drug purchases and strong moat given the strict regulations around pharmaceutical transportation in Canada. It has also been making acquisitions in the U.S.
While we were lucky with the quick stock appreciation after the UPS acquisition, we were also a bit disappointed. We wanted to own it for a longer period of time and hoped it would do better than the UPS acquisition price. We sold our shares on April 24 for $53.42 each. We decided not to wait until the deal closed so we could put the money into another stock.
This interview has been edited and condensed.