Alex Letko — Pro Picks: Global Bargain Hunting (In the Money, Jun 2026)

One-line take: A "Pro Picks" segment built on one repeated screen — find an industry leader with a structural moat, double-digit earnings growth and a strong dividend, trading in the low teens, "a combination you'd be hard-pressed to find in developed markets" but that emerging markets keep offering on sale. Copel (Brazilian integrated utility, his EM fund's TOP holding): free hydro/wind input puts it at the bottom of the cost curve, three regulated return streams smooth earnings, ~15% growth, ~5.5% 2027 dividend, ~13× next-year earnings. Bolsa Mexicana (the Mexican stock exchange + custody monopolist): a natural monopoly on a financial-penetration secular trend, double-digit growth, ~6% yield, ~11× — so cheap that disruption "around the edges" is survivable. Air Canada (the eyebrow-raiser, an airline mid oil-crisis): premiumization + the A321XLR fleet inflection drive EPS from ~$1.50 to ~$6 by end of decade; on a conservative 8× exit that's a ~$50 stock, "more than double," with the free-cash-flow inflection ~2028. Timestamps link into the video.

1. Stocks & names mentioned

Ticker	Name	Research	View	What he said	At
ELPC	Copel (Companhia Paranaense de Energia)	QT · SA · STK · FA	Positive	A high-quality company "on sale" in Brazil — an integrated utility (hydro+wind generation, transmission, distribution) at the bottom of the industry cost curve because hydro/wind input is free; three regulated return streams smooth earnings (low beta). ~15% earnings growth, ~5.5% dividend on 2027 (75% payout, upside since recent years ran ~100%), ~13× next year's earnings. "Our top holding in the emerging markets fund."	1:20
BOLSA A	Bolsa Mexicana de Valores	QT · SA	Positive	The Mexican stock exchange — 80% of national trading volume flows through it, plus a custody monopoly (anyone needing a custodian in Mexico goes through its subsidiary). A high-quality way to play financial penetration (only ~50% of adults are banked) with the monopolist; grows faster than GDP, double-digit earnings growth, ~6% yield, ~11× next year's earnings — at 11× "there's not a ton of upside priced in," so disruption "around the edges" is survivable vs a 25× name.	3:47
AC	Air Canada	QT · SA · STK · FA	Positive	The eyebrow-raiser — an airline brought mid oil-price crisis because current volatility masks a multi-year growth story: premiumization (à la Delta) plus a capex inflection on new aircraft (Airbus A321XLR, first flight this June). The narrow-body connects hubs to secondary European cities with more premium seats (higher revenue/seat) while burning ~30% less fuel/mile, so revenue grows faster than cost → margins toward "high double digits," +5% capacity. EPS ~$1.50 this year → ~$6 by end of decade; on a conservative ~8× that's ~$50, "more than double." Long-term horizon; FCF inflection closer to 2028.	8:02

"View" is Alex Letko's stance in this conversation (all three picks are Positive), not a price rating. Research links: QT Qualtrim · SA Seeking Alpha · STK Stock Analysis (omitted/adjusted where no clean US page exists). Copel displayed via its NYSE ADR ELPC (the live ticker since the Dec-2025 mandatory ADR conversion from ELP; B3 lines: CPLE3/CPLE6); Bolsa Mexicana trades as BOLSA A on the BMV (OTC ADR BOMXF); Air Canada is AC on the TSX. Passing peer mentions (TMX, Nasdaq, ICE, Delta, Airbus) are not given rows.

2. Talking points

0:31 Three geographically diverse ideas — and why Brazil

Brings three picks (Brazil, Mexico, Canada — the Canadian one saved for last). The Brazil case: optimism on political change, plus a market that has "given up" on it at a time when GDP remains robust — so leaders are cheap.

1:20 Copel — bottom of the cost curve, the free electron

An integrated utility owning a portfolio of hydropower stations and wind farms. "Hard-pressed to manufacture an electron cheaper than Copel" — they sit toward the bottom of the industry cost curve because their input (hydro and wind) is free.

1:42 Copel — three regulated return streams smooth the earnings

On top of generation they own the transmission business and the distribution business, each with its own regulated rate of return — smoothing earnings so they don't rely purely on power generation for growth. That sustainability through the cycle (low beta) "is very valuable." Operates in populous Paraná (12 million people).

2:21 Copel — the growth + yield + cheap combination

~15% earnings growth; on 2027 a ~5.5% dividend at a 75% payout — and recent years ran nearer 100%, so there's upside to the yield. Stock at ~13× next year's earnings. "Double-digit earnings growth, a great dividend yield, and trading in the low teens — a fantastic combination" and the kind EM keeps offering on sale.
It's in his new retail EM offering, and is "our top holding in the emerging markets fund."

3:47 Bolsa Mexicana — the exchange + custody monopoly

The Mexican stock exchange: 80% of all the country's trading volume flows through it. It's also a monopolist on custodial services — any custodian in Mexico must go through its subsidiary. "A fantastic industry positioning."

4:14 Bolsa Mexicana — playing financial penetration with the monopolist

Only ~50% of Mexican adults have a bank account; if you believe financial penetration grows and more people trade personal accounts over time, the highest-quality way to play that secular trend is the monopolist. Grows faster than GDP, double-digit earnings growth, ~11× next year's earnings, ~6% yield — a combination hard to find in developed markets at that price.

4:57 Mexico/US trade risk — buy the industry leaders

Mexico is mid-negotiation with the US (like Canada) — "of course it's a risk." His defense: a "community of interest will prevail," and in his portfolios he falls back on particularly high-quality industry leaders (not fringe players) that can weather downturns — "park your assets in a safer part of the market" through uncertainty.

6:14 Why exchanges rolled over — and the valuation cushion

Global exchanges (TMX, Nasdaq, ICE) have been pressured on tech-disruption fears (prediction markets, AI). His view: a dominant leader with massive market share should be among the first to move on new lines of business and get in front of disruption. And at ~11× earnings "there's not a ton of upside priced in" — so disruption "around the edges" is survivable; it's a relatively safer position than a stock at 25×.

7:28 Air Canada — why an airline now, mid oil crisis

"That stock can give you a double in 2 months or wipe you out in 2 months" — very volatile. Brought it amid jet-fuel worry. "We're not oblivious… a pick like this raises eyebrows" — but if active managers are doing their job, some picks engender that reaction. The current volatility "masks an underlying growth story."

8:14 Air Canada — premiumization + the A321XLR economics

Driven by a consumer shift toward premiumization (Delta investing heavily in premium cabins), plus a heavy capex inflection bringing on new aircraft — the Airbus A321XLR (a narrow-body, first flight this June). It connects hubs to secondary European cities with more premium ticketing (higher revenue per seat) while burning ~30% less fuel per mile — so costs don't rise with the revenue opportunity.

9:31 Air Canada — margins, EPS to $6, don't be a hero on valuation

As the fleet gets flying over the next several years, revenue grows much faster than cost → margins toward "high double digits" per guidance, plus ~5% capacity. EPS from ~$1.50 this year to ~$6 by end of decade — "you don't need to be a hero on your valuation assumption to make a lot of money."

10:31 Air Canada — an 8× exit = a ~$50 stock

By end of decade, $6 EPS needs only ~an 8× multiple — "that's not chasing a high valuation"; the stock has traded much higher historically. 8 × 6 = 48, "call it a $50 stock," more than double from here.

11:09 Air Canada — long horizon, quality balance sheet, the 2028 FCF inflection

"Letko Brosseau… very long-term oriented investors." It won't be a straight line, so they require the company be high-quality with a good balance sheet that can withstand any air pocket — they believe it is. The catalyst — a free-cash-flow inflection — is closer to 2028 if they execute; "we don't mind holding the stock here at all."

3. In plain English

A jargon-free summary of the thesis behind each pick — what it actually is and why he holds that view. (Plain-language companion to the table above; renders on each ticker's consolidated page.)

ELPC — Copel (Companhia Paranaense de Energia) Positive

Copel is a Brazilian power company that does the whole job — it generates electricity (from dams and wind farms), it owns the high-voltage lines that carry it (transmission), and it owns the wires that deliver it to homes and businesses (distribution). That's what "integrated utility" means. Because its fuel — falling water and wind — is essentially free, almost nobody in Brazil can make electricity more cheaply; in industry terms it sits at the bottom of the "cost curve," the ranking of producers from cheapest to most expensive.

The clever part for an investor: each of those three businesses earns a government-set ("regulated") rate of return, so even if power prices wobble, the transmission and distribution arms keep earnings steady — a "low beta" stock that doesn't lurch around with the market. It grows earnings about 15% a year, pays roughly a 5.5% dividend (with room to pay more), and trades at only ~13× next year's earnings — cheap for that quality. Letko says it's the single largest holding in their emerging-markets fund.

BOLSA A — Bolsa Mexicana de Valores Positive

Bolsa Mexicana is the company that runs Mexico's stock exchange — 80% of all the buying and selling of Mexican securities runs through it. On top of that, it owns the country's custodian (the firm that safekeeps shares for everyone); if you need a custodian in Mexico, by law you go through them. That's two natural monopolies stacked together: the marketplace and the vault.

The growth bet is "financial penetration" — only about half of Mexican adults even have a bank account, and as more people open accounts and start investing, more activity flows through the one company that owns the plumbing. It grows faster than the overall economy, yields about 6%, and trades at only ~11× next year's earnings. That low price is itself the safety net: because almost no growth is priced in, even if newer technology (prediction markets, AI) chips away "around the edges," there's little to lose — very different from a glamour stock at 25× that needs everything to go right.

AC — Air Canada Positive

This is the deliberately contrarian pick: buying an airline in the middle of an oil-price crisis, which Letko admits "raises eyebrows." His argument is that the scary headlines hide a real multi-year growth story. Two things drive it. First, premiumization — travelers increasingly pay up for nicer cabins (as they're doing with Delta in the US), so Air Canada can sell more high-margin seats. Second, a fleet upgrade: the new Airbus A321XLR (a single-aisle "narrow-body" jet) can fly Air Canada's hubs to smaller European cities with premium seating, and it burns about 30% less fuel per mile — so revenue can climb much faster than costs.

That combination — higher prices, more capacity, lower fuel cost — should push profit margins up sharply, taking earnings per share from about $1.50 this year toward $6 by the end of the decade. Crucially, you don't have to assume the stock gets expensive ("you don't need to be a hero on valuation"): even at a conservative 8× those earnings, that's a ~$50 stock, more than double today. The big cash-flow turn arrives around 2028, so it's a patient, long-term hold in a name quality enough to survive the bumps along the way.

Analysis distilled from the public YouTube video (transcript in transcript.txt) for personal study. Stances are Alex Letko's framing in this appearance, not price targets. Not investment advice. © In the Money with Amber Kanwar for source material.