Martin Cobb Reveals Key Stock Picks for September 2025

Martin Cobb, Senior Vice President of Equities at Lorne Steinberg Wealth Management, has identified three key stock picks for September 11, 2025. His selections include **Automatic Data Processing**, **Linde**, and **Open Text**, reflecting a strategic focus on both global and North American equities.

Investors are currently seeking a “Goldilocks” economy—one that is neither too hot nor too cold—which could prompt interest rate cuts without significant economic downturn. Cobb notes that historically, markets tend to rise when the **U.S. Federal Reserve** resumes cutting rates, provided the economy does not enter a recession in the following year. Presently, a significant portion of economic growth is increasingly reliant on technology capital expenditures, raising concerns about the narrow performance of the U.S. stock market, which is heavily influenced by a limited number of companies.

In Canada, the likelihood of the **Bank of Canada** implementing a rate cut has surged above **80%** due to a lackluster employment landscape and a struggling housing market. The Canadian stock market now trades at a more competitive valuation compared to its U.S. counterpart, marking a shift from previous years.

Cobb references a 2018 study titled “Two Centuries of Innovations and Stock Market Bubbles,” which analyzed **51 innovations** from **1825 to 2000**. The study concluded that nearly **three-quarters** of these innovations were accompanied by market bubbles. The question remains whether the current wave of artificial intelligence will follow suit. Nevertheless, if the narrative continues to captivate investors, they may overlook the absence of tangible returns on substantial investments.

Top Stock Picks: Key Insights

**Automatic Data Processing (ADP NASD)** stands out as a global leader in HR management software and services. With a client base exceeding **1 million** across **140 countries**, the majority of its revenue—**90%**—comes from North America, where it processes paychecks for around one in six American workers. The industry benefits from steady growth driven by outsourcing and regulatory compliance, with annual growth rates of **5-6%**. ADP enjoys a **90%+** customer retention rate and maintains a robust financial position, consistently holding more cash than debt. This stability enables the company to forecast earnings per share (EPS) growth of approximately **10%** annually.

**Linde (LIN NASD)** is recognized as a leading industrial gases company, supplying essential gases across various industries. The company operates within a high-margin sector characterized by significant barriers to entry, ensuring consistent growth and strong pricing power. With new opportunities in hydrogen and carbon capture markets, Linde anticipates low double-digit EPS growth driven by expanding margins and a gradual reduction in share count. The valuation in the mid to upper **20s** aligns well with its defensive nature and strong balance sheet.

**Open Text (OTEX TSX)** offers software solutions that help organizations manage their data effectively. Although not positioned for high growth, Open Text allocates approximately **15%** of its sales to research and development, ensuring its products remain competitive. The company boasts a loyal customer base, with around **80%** of revenues recurring annually. Despite discussions surrounding its organic growth, Open Text generates nearly **$1 billion** in free cash flow each year, enabling significant share buybacks.

Performance of Past Picks

Cobb’s past selections have performed well, with notable returns. For example, **Techtronic Industries (669 HK)**, initially priced at **hk$88.85**, has risen to **hk$98.45**, yielding an **11%** return. **Alphabet (GOOGL NASD)** has seen a significant increase from **US$172.90** to **US$238.15**, reflecting a **38%** return. In contrast, **Canadian Natural Resources (CNQ TSX)** has shown minimal movement, moving from **$43.05** to **$43.47**, with a mere **1%** return. Overall, Cobb’s past picks have averaged a total return of **17%**.

As the market navigates these complex economic dynamics, Martin Cobb’s insights provide valuable guidance for investors looking to optimize their portfolios in the coming months.