Scott Morrison — The $2.2 Billion Contrarian: How to Profit From Unpopular Ideas

Shinhan is one of South Korea's five big banks, and you can buy it in New York rather than in Seoul. Morrison's argument is almost entirely a price argument: Korea's banking system looks structurally like Canada's — a handful of players, huge scale, deposits that don't move — but the shares trade for less than the accounting value of the bank ("below book"), and for single-digit multiples of profit, while Canadian banks trade at two-to-three times book and mid-teens multiples. He says the gap between two similar industries in different countries is about as wide as he's seen in thirty years.

The catalyst is the rate cycle running the other way. Korea's AI-memory boom is so strong (chip employees getting outsized bonuses) that its central bank is raising interest rates while Canada's is on pause after cutting. Banks earn more when rates rise, because they lend at higher rates faster than they pay out on deposits. Add a government change that has pushed Korean companies to pay and grow dividends, plus his own visit to a fully-automated Shinhan branch, and you get a cheap bank with improving profitability — his favourite shape. It's also, in his words, a cheaper "derivative play" on the memory boom than buying the chipmakers.

Zeta helps companies spend their advertising money better. It owns large databases about consumers that it built up over years, and it combines those with a client's own customer data to work out which ads to send to whom. It sells both to big companies directly and to the advertising agencies (Publicis, WPP, Omnicom) that buy media on their behalf.

Morrison's screen was deliberately not "who sells AI" — he thinks that trade (Nvidia and the other "picks and shovels") is over. He asked his team for companies that use AI on data nobody else has. Zeta fits: it has more cash than debt ("net cash," so it can't be forced into trouble by lenders), it's still run by its founder, and it benefits from a trust problem — plenty of advertisers don't want to hand their customer data to Google or Meta, so they'd rather work with a neutral party. A newly announced joint venture with Palantir is the outside validation, though he's careful to say Zeta won't ever be valued like Palantir. He thinks the business "can double or triple in size."

Tritax owns very large warehouses in the UK and rents them out — the "big boxes" behind e-commerce and modern supply chains. It's structured as a REIT, meaning it's a listed property company that passes most of its rent to shareholders as dividends.

Two things make it cheap. First, nobody has built new UK warehouses for five years, because UK borrowing costs jumped (the government 10-year bond yield is 5%) and the country has been unfashionable since Brexit. Second, the shares change hands at a "7% cap rate" discount and well below what it would cost to rebuild the same buildings today — so you're buying property for less than replacement cost, with little debt against it ("low loan-to-value") and founders still running the company.

The demand side is where the surprise is. Defence budgets mean drones and equipment that have to be stored somewhere, a tenant type that didn't exist before, layered on top of normal e-commerce growth. And some of these sites already have grid power connections — which, in a world where data centres are queuing for electricity, means a warehouse can potentially be re-purposed into something worth much more. That's free optionality on top of the rent.

BlackBerry no longer makes phones; it sells software. Two pieces matter. QNX is the operating system that runs inside cars — the software layer everything else in the vehicle sits on. As cars become self-driving computers, that software has to be effectively fault-free ("five nines" reliability) and pass safety certifications, which is why it takes years to win a slot and why, once you're designed into a model year, the revenue keeps arriving as those cars get built and sold. Hyundai is a customer. The second piece is secure communications sold to governments, which is suddenly booming because NATO members are being pushed to show they're spending on defence.

Morrison bought it again last year after touring the Ottawa R&D site, meeting the QNX engineers, and — on the same trip — hearing an Ottawa politician describe the coming defence spending. He then counted how few listed Canadian companies could capture that money (Calian, MDA, Kraken Robotics… "and then we're done"), which made BlackBerry an obvious candidate. The balance sheet is clean and the stock carries a depressed software multiple. His extra kicker: the two divisions probably shouldn't live together, and selling the security business would both strengthen the balance sheet and make the remaining QNX story easier for investors to value.

Kinaxis, based in Ottawa, sells software that large companies use to plan their supply chains — where to make things, how much inventory to hold, what to do when a tariff or a shipping disruption blows up the plan. Gartner, the industry rating shop, puts it in the top tier, and it wins most of the Fortune-500 bake-offs it's invited to.

So why is it cheap? Investors dumped everything software-related this year, and Kinaxis had a leadership vacuum — a CEO change, no CFO for a while (a new one was announced this week), an investor-relations head retiring. Big funds prefer to "wait and meet the new team," which leaves the shares stranded. Morrison calls this a "two-quarter problem" or a "bear trap": a temporary dislocation in a business that isn't structurally broken. His rule is that certainty is expensive — if you wait until everything is resolved you pay up — so the way to earn the return is to do the work yourself and accept a bit of unresolved risk.

The tell that management agrees: the company holds more cash than debt, hits the "rule of 40" (growth plus profit margin adding to 40%+, a software quality bar), and it went out in the spring and bought back an unusually large amount of its own stock in the high-120s/130s — before the new CFO arrived. Doing that without the executive who normally signs off on capital decisions tells you how cheap the board thought it was. At a ~$4 billion size, he wouldn't be surprised to see it acquired.

Primaris owns Canadian shopping malls — not the trophy ones. The consensus view is that malls are dying. Morrison's view came in sideways: while researching clothing retailers last year he kept hearing the same complaint from every chain — it's getting hard to find space. That's the setup he hunts for, "supply down, demand up."

No one builds malls anymore, and in a post-COVID world of expensive concrete and labour it would cost far more to build one than the market is valuing Primaris's existing ones at (a "discount to replacement value"). The shares also trade below the appraised value of the properties ("discount to net asset value") on roughly an 8% capitalisation rate — the rent yield you'd earn buying the buildings outright. Meanwhile the thing that scared everyone away, Hudson's Bay going bankrupt, actually helps: a weak tenant that couldn't pay is replaced with a grocer or a TJX/Winners with a stronger balance sheet, at market rent.

The signal he points to is the CEO buying 10,000 shares of his own company on June 30, just before the reporting blackout, with the stock at a 52-week high — insiders don't usually buy strength unless they think the gap to value is still wide. He calls it "a very conservative compounder," and notes that if Simon Property (the largest US mall owner, valued far more richly, with a strong US dollar against a weak Canadian one) wanted to expand north, Primaris is the obvious target.

Asked whether Canadian banks at record highs are a bubble — David Rosenberg says yes — Morrison says no, and explains why shorting them has failed for two decades. Canadian banking is an oligopoly: five players, enormous barriers, and a structural flywheel of buying. The banks buy back their own shares (all three of Royal, BMO and CIBC raised their buybacks on the last round of results), they own each other — Royal Bank's largest shareholder is the other Canadian banks, which is not how other countries' banking systems work — financials are about 40% of the Canadian index, so every index-fund and ETF dollar buys them mechanically, and when you sell a business and park the proceeds at your bank, the bank invests some of it back into itself.

On top of the flywheel: returns on equity are rising, dividends are growing, high interest rates make lending profitable, wealth management gives them predictable fee income, capital markets are in a lucrative window (huge IPOs coming), and AI is likeliest to pay off for big organisations with enormous proprietary databases — which describes a bank exactly. His only caution is arithmetic: after ~30% in a year and a big re-rating on price-to-book, you can't extrapolate the same again over the next 12–18 months.

Within the Canadian bank group, BMO sits at the top of his "pecking order." He likes what CEO Daryl White has done with the franchise and specifically likes that BMO has meaningful US commercial-banking exposure — a second engine that most of its domestic peers don't have to the same degree. Like the rest of the group, it raised its buyback on the most recent call, which shrinks the share count and lifts per-share earnings without needing the market to pay a higher multiple.

CIBC is his other named preference in the group, for a simple self-help reason: a new chief executive (Harry Culham) is pushing hard into wealth management for high-net-worth clients. That kind of business earns recurring fees rather than one-off transaction income, so it's valued more highly. His broader point is that these banks still have concrete levers left — "there are a lot of little drivers if you listen to them, if you go to their analyst days" — which is not what a bubble looks like.

SK Hynix makes memory chips, including the "high-bandwidth memory" that sits next to AI processors and feeds them data. The position came from process, not a hunch: his teammate Devon visited Nvidia's head office years ago, learned that when Nvidia needed this kind of memory there was literally one company it could phone, noticed that company had offices across the street, and said they had to buy it. A sole supplier to the fastest-growing customer in technology is, as Morrison puts it, "an awesome business."

He's blunt that he is "not in the memory bubble camp." Memory used to be brutally cyclical, but there are now only two or three credible suppliers — an oligopoly — and the shares throw off free cash flow equal to the high-teens to low-20s percent of their market value, which is extraordinarily cheap for a business in a boom. His discipline is to watch supply rather than guess demand, and supply can't respond quickly: chip fabs take years and the equipment queue at ASML and Lam Research is long. The bubble, in his view, is elsewhere in AI — "the fourth or fifth" large language model, which is already being commoditised.

Samsung is the other leg of the memory oligopoly, and it shows up in the same spreadsheet at the same kind of valuation: free cash flow equal to the high teens or low twenties percent of its market value, versus mid-to-high teens for the American competitor Micron. He notes Canada simply has no company like it — "we're not blessed with a Samsung."

It matters to his other pick too. The memory boom is generating enough profit (and enough employee bonuses) to lift the whole Korean economy, which is why Korea's central bank is raising rates while Canada's is on hold — the mechanism that makes Shinhan's earnings improve. So Samsung and SK Hynix are both direct holdings and the engine behind the bank call.

Micron is the American member of the memory oligopoly, and here it plays the role of yardstick rather than pick. In his spreadsheet Micron's free-cash-flow yield sits in the mid-to-high teens while the two Korean names are in the high teens to low twenties — a gap wide enough, he suggests, that SK Hynix has been coming to North America to tell its story and close it. The takeaway for a listener is that all three are cheap by his measure; he just prefers the cheaper two.

SEGRO is a UK owner of industrial and warehouse property. Morrison bought it because the shares traded at a large discount to the appraised value of the buildings — the same logic behind his Tritax pick. The punchline arrived the morning of this interview: Prologis, the biggest US industrial landlord, made its second takeover bid.

That sequence is the whole point of his process. Prologis trades above the value of its own properties, so it can pay a premium for SEGRO's discounted ones and still create value for itself — which is exactly why undervalued listed real estate gets bought. It's one of more than 30 takeover offers his holdings have received since 2018, and increasingly the buyers are non-American.

Rotork is a UK maker of valve actuators — the motors that open and close industrial valves in pipelines and plants. It's in the notes here as evidence rather than as a fresh pitch: it was a Wealhouse holding, and last week ABB of Switzerland made a takeover offer for it. One of three bids for his companies inside a single week, which he reads as the market catching up to his underwriting rather than luck.

PolyPeptide is a Swiss contract manufacturer of peptides — it makes the active ingredients for other companies' drugs. Wealhouse owned it, and on the Monday of this week Samsung Biologics of Korea bid for the company. The reason it's worth recording is the pattern: a cheap, unglamorous, non-American business bought by an international acquirer, exactly what his "value outside North America" thesis predicts should keep happening.

Klépierre is one of the largest shopping-mall owners in France, and Wealhouse has held it "for a while." It's the European expression of the same trade as Primaris: buy the landlord, not the tenant, at a discount to what the properties are worth, in a world where nobody is building new malls and the surviving tenants are financially stronger than the ones that went bankrupt.

There's a consolidation angle too. Simon Property Group, the biggest US mall owner, already owns about 20% of Klépierre — so an obvious strategic buyer is already sitting on the register.

Federal Realty is his remaining US retail-property holding after Whitestone was taken over. He's careful to distinguish it: "it's not a mall company, it's more service retail" — the everyday shopping centres anchored by grocers, pharmacies, gyms and restaurants, the kind of tenants people visit in person and that online shopping doesn't replace. He calls it a "very quality company," riding the same shift he describes as the pendulum swinging from tenant power back to landlord power.

EastGroup is the US way he'd play the warehouse thesis behind his Tritax pick — "in the US we like East Group." The logic is identical: little new supply was built while interest rates were high, and demand is now being pushed up by automation. As warehouse wages went from roughly $15 to $25–30 an hour, tenants finally started installing robots, which means retooling buildings and spending capital inside them — and a tenant who has just poured money into a facility is both stickier and more able to pay rising rent.

Dream Industrial is the Canadian-listed option he offers listeners who want warehouse exposure without buying a UK or US name. Same thesis in a domestic wrapper: warehouses, five years of almost no new construction, and rising demand from e-commerce and automation-driven retooling, with the landlord capturing higher rents as leases roll over.

Calian, based in Ottawa, provides technology, health and defence-related services largely to governments — the kind of contractor that benefits directly when Ottawa decides to spend more on the military. Morrison owns it, and the sourcing is the interesting part: he found it in the same round of Ottawa meetings that produced his BlackBerry purchase, sitting at a dinner with a Calian executive while a politician explained where defence money was going.

His broader observation is a scarcity argument. Canada has very few listed companies capable of capturing a domestic defence build-out — he names Calian, MDA (which he doesn't own) and Kraken Robotics, then says "and then we're done." When the money has almost nowhere else to go, owning the few available recipients is a low-imagination way to participate.

Groupe Dynamite is a Montreal fashion retailer whose banners include Garage and Dynamite. Wealhouse bought it as a broken IPO — the shares were below their offering price — during the April tariff panic, when he deliberately went and did fresh work on the whole clothing sector because everything had been crushed.

His research edge here is unusually literal: his daughter and her friends. That signal has worked since Lululemon's own underwater 2008 IPO, then again with Aritzia, and now with Groupe Dynamite — though he admits Garage's younger shopper is harder for a 55-year-old to read in person. On numbers, it still generates free cash flow equal to a high-single-digit percentage of its market value (it was above 20% fourteen months ago, so much of the easy money is made), it's led by what he calls a "kick butt founder," and he thinks the company can "double or triple in size," following the path Aritzia took after Lululemon. The one caveat he states plainly: right now he'd rather own the landlords than the retailers who rent from them.

Aritzia is the Vancouver-based womenswear retailer, and it's the name that made the daughter-channel-check famous in his shop — "Aritzia won hands down; that was a layup." He owned it in size in the past, most recently buying during the April 2025 tariff sell-off, and he's visited the head office. He still calls it a great franchise capable of following Lululemon's path.

He just doesn't own it today, and the reason is price rather than doubt: it now generates free cash flow worth only a low-single-digit percentage of its market value, versus the high-single-digits at Groupe Dynamite and the 20%+ available a year ago. Combined with his view that the balance of power has shifted from retailers to the landlords they rent from, that puts Aritzia on the watch list rather than in the portfolio.

Propel lends small amounts of money online to borrowers with weak credit, mostly in the United States. The stock has been punished for two reasons: goeasy, a bigger Canadian lender in a similar business, blew up and Propel got tarred with the same brush; and investors are worried about a US consumer credit squeeze in a "K-shaped" economy, where Propel's customers are on the losing branch.

Morrison likes what he sees on the surface — it screens cheap on several measures, giving what he calls "valuation protection," and he has met founder-owner Clive Kinross twice and found him impressive (he prefers founder-led businesses). But he hasn't bought. For a lender, the thing that kills you is your own balance sheet and your loan-decision process, and that's the one risk you can actually control amid all the macro noise, so he wants to sit down with the people who actually approve the loans before committing. His cautionary reference is a UK lender he owned, International Personal Finance, which "always looked cheap and then got taken private" — cheapness alone doesn't get you paid. Verdict: on the watch list, diligence in progress.

CAE builds flight simulators and trains pilots — Morrison has flown (and crashed) one of their machines near Montreal and rates the technology. But he's never been able to buy it, for a structural reason worth generalising: once a Canadian company is recognised as high quality, a small group of very large domestic funds crowds into it and effectively has to own it, so it rarely becomes "definition cheap."

There's also a live risk he flags. A meaningful part of CAE's business is American, and Canada–US relations are being deliberately kept uncertain; if Canada buys its fighter jets elsewhere, Canadian defence suppliers could be penalised in retaliation. Good company, wrong price, real political overhang.

Apollo is one of the giants of private equity and private credit — it raises money from institutions and lends it or buys companies with it. Morrison met the firm in June and calls it "an incredibly great franchise" with great underwriting, so this is not a bearish view on Apollo itself.

It appears here because of where he does see bubble risk. When asked whether Canadian banks are dangerous, he redirected: the worry is the private-equity and private-credit world, where some managers have been valuing their own holdings on questionable assumptions ("marks") while using borrowed money. There may have been a thousand private-equity firms when he started his career and there are perhaps ten or fifteen thousand now — far too many, most of them funded by the free-money era. As a wall of debt matures over the rest of the decade, the weak underwriters get exposed. His distinction is explicit: the trouble will come from the small managers who have already been blocking client withdrawals ("gating"), not the top-tier firms with deep institutional relationships.

First Capital owned Canadian grocery-anchored shopping centres, and Wealhouse was a large shareholder until it was bought by Choice Properties and KingSett Capital. It's recorded as a realized win in the retail-landlord theme, and as one of his central pieces of evidence: private and strategic buyers are coming into the public market to buy these assets, which tells him the listed prices were too low.

Whitestone owned US "service retail" — neighbourhood centres full of the businesses people physically visit. Wealhouse held it and it was taken over by Ares Management, the private-capital firm. Same lesson as First Capital: he was buying a discount to property value, and a buyer with access to private money agreed. His remaining US exposure in this category is Federal Realty.

goeasy lends to Canadians with poor credit. It's in this conversation as the cautionary case, twice. First, when Morrison argues the Canadian banks are safe, he concedes credit trouble is real in Canada — "goeasy and the subprime lending space has had some troubles" — and pins it on business models that aren't diversified enough to absorb a bad cohort of loans. Second, when weighing Propel, he identifies risk management as "the problem at goeasy ultimately": in lending, the failure mode isn't the market, it's your own loan decisions plus leverage. Note this is a negative reference, not a pitch to short the stock.