RE:RE:Canaccord Genuity upgrade The Toronto market's large concentration of resource shares "provides a good hedge for global investors against the possibility of a prolonged commodity supply-shock," said Angelo Kourkafas, investment strategist at Edward Jones in St. Louis, Missouri.
Foreign investors have taken notice, plowing a net C$46 billion ($36 billion) into Canadian equities last year, the most since 2016, according to data from Statistics Canada.
Among the companies that investors favor are copper miner Hudbay Minerals Inc, which trades at a forward price-to-book ratio of 1.24 versus the industry average of 1.61, Refinitiv data shows.
Its valuation should play catch-up as the company has "laid the groundwork" for growth, said Michael Sprung, president at Sprung Investment Management.
Paul Gardner, a portfolio manager at Avenue Investment Management, says the gold sector is "generally cheap" relative to the price of bullion. He sees Agnico Eagle Mines Ltd as a long-term buy and expects Canadian Natural Resources , the country's biggest oil producer, to benefit from the rally in oil prices.