Canadian General Investments' Strategic Position in a Shifting Market

In the wake of the 2025 economic downturn, Canadian General Investments (CGI) has emerged as a compelling case study in capitalizing on undervalued equities. By leveraging a diversified portfolio, strategic sector allocations, and a long-term investment philosophy, CGI has not only navigated market volatility but also positioned itself to outperform broader benchmarks. This analysis explores how CGI's approach aligns with the opportunities inherent in a post-recession environment, supported by recent performance metrics and valuation analyses.

A Diversified Strategy Anchored in Long-Term Growth

CGI's investment strategy is built on a foundation of prudent stock selection and sector diversification. As of November 30, 2025, the fund's portfolio was weighted heavily toward the Information Technology sector at 25.3%, followed by Industrials (18.2%), Materials (15.1%), and Financials (13.7%) according to Barchart data. This allocation reflects a deliberate focus on high-growth industries while maintaining exposure to cyclical sectors. Notably, CGI's top ten holdings accounted for 39.7% of the portfolio, with Celestica Inc. and NVIDIA Corporation representing significant stakes according to Barchart data.

The fund's approach extends beyond traditional equities. In response to economic uncertainty driven by U.S. President Trump's tariff policies, CGI has increased its exposure to alternative assets such as gold and uranium. According to analysis, investments in streaming companies like Wheaton Precious Metals and gold producer Alamos Gold, alongside a top holding in Franco-Nevada, underscore its commitment to diversification. Similarly, CGI added uranium stocks in 2024 and expanded into infrastructure and property investments, signaling a proactive stance toward sector rotation.

Outperforming the Market Through Prudent Risk Management

CGI's performance in 2025 has been robust, with an unaudited net asset value (NAV) per share of $80.73 as of November 30, 2025. This translated to year-to-date and 12-month returns of 18.2% and 13.9%, respectively, outpacing the S&P/TSX Composite Index's 30.0% and 25.7% returns over the same periods. The fund's measured risk management is evident in its reduced leverage ratio of 11.9% of net assets, down from 13.8% at the end of 2024. This adjustment highlights CGI's focus on preserving capital while maintaining growth potential.

Undervaluation and Attractive Valuation Metrics

Despite its strong performance, CGI appears undervalued relative to its intrinsic worth. A DCF model estimates its intrinsic value at CA$185.81 per share as of October 2025, suggesting a 34.6% undervaluation. A second DCF analysis from July 2025 corroborates this, placing intrinsic value at CA$185.66 per share, or a 31.5% discount according to Webull data. These figures are further supported by CGI's Price-to-Earnings (PE) ratio of 15.7x (October 2025), which lags behind the IT industry average of 21.8x and its peer group average of 62.7x according to Yahoo Finance data.

Recent earnings data reinforces CGI's value proposition. In Q3 2025, the fund reported revenue of $4.09 billion and earnings per share (EPS) of $2.10, both exceeding forecasts. Its strategic emphasis on artificial intelligence (AI) and managed services, which account for 40% of IP-based revenue, positions it to capitalize on long-term growth trends. Analysts project substantial revenue and earnings expansion by 2030, with the stock potentially rising 90% if it reverts to historical average multiples.

Future Outlook: A Post-Recession Opportunity

CGI's long-term stock selection strategy-many positions held for decades-aligns with the opportunities in a post-recession environment. The fund's selective additions in 2025, including infrastructure and property investments, reflect a disciplined approach to capital allocation. Moreover, its underweight in financials and overweight in technology underscore confidence in the resilience of high-growth sectors amid macroeconomic shifts.

For investors seeking exposure to undervalued equities, CGI presents a compelling case. Its combination of sector diversification, risk-adjusted returns, and attractive valuation metrics positions it to benefit from market rebounds. As the economy stabilizes, CGI's strategic positioning could unlock significant upside for shareholders.

Conclusion

Canadian General Investments has demonstrated a rare blend of resilience and foresight in navigating the 2025 downturn. By prioritizing undervalued equities, alternative assets, and long-term growth sectors, CGI has not only outperformed benchmarks but also created a compelling value proposition for investors. With its intrinsic value significantly undervalued and a robust pipeline of opportunities in AI and infrastructure, CGI stands as a testament to the power of strategic positioning in a shifting market.