1. Cavvy Energy (TSX:CVVY)

Year-to-date gain: 227.27 percent
Market cap: C$258.65 million
Share price: C$0.90

Cavvy Energy is a Canadian energy company based in Calgary, Alberta, with operations in Alberta and British Columbia. The company operates as a upstream producer and midstream custom processor, and produces natural gas, condensate and gas liquids, and sulfur.

In a November 7 press release, the company underscored a strong operational and financial performance in the third quarter of 2025, producing 23,956 barrels of oil equivalent per day and generating C$30.6 million in net operating income.

According to CEO and President Darcy Reding, the results were supported by a 14 percent increase in third-party processing volumes over the prior quarter, while hedging gains helped cushion the impact of a weak summer gas market for AECO natural gas spot prices.

The company also strengthened its forward outlook by securing a structured pricing agreement for 2026 sulfur sales, providing downside protection while maintaining exposure to higher prices.

Shares of Cavvy Energy rose to a year-to-date high of C$0.96 on November 20.

Cavvy Energy’s 2026 guidance projects steady production of 22,000 to 24,500 barrels of oil equivalent per day (boe/d) and a significant 25 percent increase in net operating income compared with 2025, underpinned by strong sulfur and third-party processing revenues.

The Calgary-based producer plans to aggressively reduce long-term debt by up to C$50 million using its free cash flow, targeting year-end 2026 debt of C$110 million to C$125 million, while maintaining disciplined capital spending of C$35 million to C$40 million.

2. Falcon Oil & Gas (TSXV:FO)

Year-to-date gain: 150 percent
Market cap: C$221.83 million
Share price: C$0.20

Headquartered in Ireland, Falcon Oil & Gas is an international oil and gas company that specializes in the exploration and development of unconventional oil and gas assets, with interests in assets in Australia, South Africa and Hungary.

On January 24, Falcon issued its first corporate update of 2025, announcing the launch of a well stimulation campaign as part of the Shenandoah South pilot project the Beetaloo Sub-basin, located in the Northern Territory of Australia.

The company has a 22.5 interest in the Beetaloo joint venture, with Tamboran Resources (NYSE:TBN,ASX:TBN) owning the remaining 77.5 percent.

On September 30, Falcon announced it had entered into a definitive agreement to be wholly acquired by joint venture partner Tamboran. The combination will create a company with roughly 2.9 million net prospective acres across Australia’s Beetaloo Basin and a projected market cap of US$500 million.

The deal is expected to close in the first quarter of 2026.

In mid-October, Falcon reported Tamboran completed its three-well batch drilling campaign in the Beetaloo Sub-basin, with all wells drilled, cased and suspended ahead of stimulation.

Shares of Falcon reached a year-to-date high of C$0.215 on December 5, coinciding with an uptick in oil benchmark values.

On December 15, Falcon reported progress at its Shenandoah South project in Australia after Tamboran completed the stimulation program at the SS2-1H well.

The campaign included 58 stimulation stages across a roughly 3,050 meter horizontal section in the Amungee Member B Shale, with high injection rates and an optimized design that is expected to reduce costs in future programs.

Initial flow testing is planned for Q1 2026, with three additional wells set for stimulation in H1 2026 ahead of gas sales, targeting the contracted 40 million cubic feet per day under the Northern Territory Gas Sales Agreement.

3. Crown Point Energy (TSXV:CWV)

Year-to-date gain: 142.11 percent
Market cap: C$16.77 million
Share price: C$0.23

Crown Point Energy is an oil and gas exploration and development company headquartered in Argentina. The company has operations in four producing basins in the country: the Golfo San Jorge basin in Santa Cruz, the Austral basin in Tierra del Fuego, and the Neuquén and Cuyo basins in Mendoza.

In August, Crown Point Energy reported its financial and operating results for its Q2 and H1 2025 periods, with average Q2 production of 4,083 boe/d and quarterly sales revenue from that production of US$22.2 million. The update highlighted continued growth and strategic investment in its Argentine concessions.

Additionally, the company provided an update on its agreements with Tecpetrol, YPF and Pampa Energía, through which it plans to acquire a 95 percent total interest in the El Tordillo, La Tapera and Puesto Quiroga concessions in Chubut.

A late September press release provided a 2024 reserve update for the Chubut concessions.

The Pampa Energía deal has since closed, resulting in Crown Point Energy acquiring an initial 35.6706 percent interest in the three concessions. The Tecpetrol and YPF asset deals are still in progress.

Shares of Crown Point Energy rallied to a year-to-date high of C$0.24 twice in 2025, first on February 12 and again on November 2.

4. Spartan Delta (TSX:SDE)

Year-to-date gain: 105.44 percent
Market cap: C$1.41 billion
Share price: C$7.17

Spartan Delta is a Canadian oil and gas company focused on sustainable value creation through disciplined operations and financial performance. The company operates a portfolio of production and development assets in Alberta’s Deep Basin and Duvernay, with an emphasis on generating free funds flow through responsible exploration and development.

Spartan continues to advance its organic drilling program while pursuing operational efficiencies, asset optimization and consolidation opportunities.

In a November announcement, Spartan highlighted robust operational and financial results for Q3 2025, with production of 43,193 boe/d, up 17 percent from the same quarter last year and 12 percent from Q2 2025, with crude oil production surging 272 percent year-over-year.

The company generated C$82.7 million in oil and gas sales and C$50.4 million in adjusted funds flow, despite historically low Albertan benchmark gas prices in September. Spartan executed a C$105.1 million capital program, primarily focused on drilling and completions, and has net debt of C$178.9 million.

To manage price volatility, the company has hedged 98,880 gigajoules per day of natural gas at C$2.35 per gigajoule and 3,149 barrels of crude oil at C$97.77 per barrel for Q4 2025.

A rally in benchmark crude prices in December added tailwinds to Spartan’s shares which registered a year-to-date high of C$7.80 on December 4.

5. Eco (Atlantic) Oil & Gas (TSXV:EOG)

Year-to-date gain: 97.44 percent
Market cap: C$116.64 million
Share price: C$0.385

Eco Atlantic is a publicly traded oil and gas exploration company focused on the Atlantic Margin. The company holds offshore exploration licenses in Guyana, Namibia and South Africa, targeting low-carbon intensity oil and gas resources in stable emerging markets near existing infrastructure.

Eco operates the 1,354 square kilometer offshore Orinduik Block in Guyana, oversees four offshore licenses in Namibia’s Walvis Basin covering 22,894 square-kilometers, and holds interests in South Africa’s Orange Basin totaling approximately 37,510 square kilometers.

In November, Eco reported steady progress across its offshore portfolio for fiscal Q2 2026, maintaining a strong balance sheet with US$2.1 million in cash and no debt, alongside total assets of US$18.9 million.

In South Africa, the company advanced work on Block 1 CBK, completing seismic data acquisition and a renaming of the block in honor of late co-founder Colin Brent Kinley. Additionally, its partner continued Block 3B/4B preparations ahead of planned exploration drilling, and identified the Nayla prospect.

In Namibia, Eco secured a one-year license extension for exploration across its four PELs and farmed out its working interest in PEL 98 to Namibian company Lamda Energy, with additional farm-out opportunities under review.

Offshore Guyana, the company remained engaged in a farm-out process for the Orinduik Block and is evaluating appraisal of the Jethro-1 and Joe-1 heavy oil discoveries.

On December 4, Eco Atlantic announced it entered a strategic partnership with Navitas Petroleum, through which the latter company can acquire exclusive options to farm into the Orinduik Block in Guyana and Block 1 CBK in South Africa.

Navitas will carry Eco’s share of exploration and potential development costs, including appraisal of existing heavy oil discoveries, with repayment tied to future production proceeds.

The news of the agreement led shares of Eco to soar from its December open of C$0.145, and they registered a year-to-date high of C$0.48 on December 17, 2025.

Will 2025 deliver a Santa Claus Rally?

This year, the S&P 500 fell during the middle of the month following a cooler-than-expected, albeit controversial, inflation report, which raised hopes for additional interest-rate cuts next year.

Despite this downturn, analysts note that a weak start to December has often failed to derail Santa’s run. Since 1950, the S&P 500 finished the Santa Claus rally period higher in 77 percent of years, even after early-month declines. By the end of the week, the index had already regained some ground, and it continued higher in the days leading up to Christmas.

“Barring any major shocks, it will be hard to fight the overwhelmingly positive seasonal period we are entering and the cleaner positioning set-up,” Goldman Sachs’ (NYSE:GS) trading desk team wrote in a note to clients, as reported by Bloomberg. ‘While we don’t necessarily see a dramatic rally, we do think there is room to go up from here into year end.”

Jeffrey Hirsch, editor-in-chief of the Stock Trader’s Almanac and Yale Hirsch’s son, also weighed in on the markets.

“It looks like (the Santa Claus rally) is set up and we can make another high by the end of the year,” he told MarketWatch. Hirsch cited cooler inflation readings and slower job growth in November, which may give the Federal Reserve room to cut interest rates in 2026.

It remains to be seen whether these predictions will come true, or if the market will be weighed down by factors including recent volatility in technology and artificial-intelligence-linked stocks.

Strategies for the Santa Claus rally

Now that the Santa Claus rally seems to be underway, investors interested in joining in have a variety of options, including domestic markets, international diversification or targeted sector plays such as mega-cap tech stocks.

As always, consulting with a financial advisor and conducting thorough research remains essential. While the Santa Claus rally offers potential rewards, market conditions can shift quickly, making flexibility and prudence key to success.

Biotech sector rebounding after US uncertainty

According to Song, biotech has rebounded since its lows in April of this year.

Company valuations are trading at a 15 percent discount to broader markets on forward price-to-earnings, with secular demand intact for oncology, obesity and chronic diseases. In Song’s view, the biotech industry’s rebound stems from reduced uncertainty under the administration of US President Donald Trump.

Song added that valuations across healthcare are reasonable, noting rotational flows from cooling AI hype.

“I can’t deny that there have been some rotational effects that not just biotech has benefited (from), but healthcare in general,’ he commented. “While AI is an important driver in healthcare, to our view, it certainly is not priced in to the largest extent in many pockets of healthcare.”

Key biotech sector catalysts in 2026

Song sees healthcare’s recovery extending into 2026, with oncology remaining the primary growth engine.

He characterized the current sector resurgence as a durable structural shift being fueled by key developments that present tangible investment opportunities, including anticipated positive clinical trial outcomes, such as those for Revolution Medicines’ (NASDAQ:RVMD) pancreatic cancer drug.

“They have a lead drug that blocks an important pathway called RAS … and they could have a potential breakthrough in pancreatic cancer. They’re running a Phase III trial to demonstrate a potential survival benefit. There could be meaningful progress there,” Song noted. A data readout is expected next year.

Outside oncology, Song flagged high-profile biotech catalysts that could broaden the sector’s 2026 rally.

“Non-peptide oral GLP-1s … are clearly going to be an important data set readout and launch that could occur next year,” he explained, citing Eli Lilly’s (NYSE:LLY) orforglipron, a daily pill that hit Phase III success for type 2 diabetes and obesity in 2025. Approval is expected in 2026, and he believes it could be a potential game changer in obesity and chronic disease treatments, an area dominated by biotech innovators.

Song also sees validation ahead for platform technologies.

A dual-track recovery for biotech

While macro analysts see a broad cyclical recovery in 2026, Song predicts that the market will be defined by a dual-track recovery: a diagnostics-led initial public offering (IPO) surge, and a biopharma M&A environment focused on companies with the clinical validation required to alter the current standard of care.

Renaissance Capital predicts a faster pace for biotech IPOs, with a strong pipeline of companies such as Aktis Oncology, a radiopharma diagnostics firm targeting solid tumors, ready to list for US$100 million.

Additionally, AlphaSense forecasts steady M&A flow as companies rebuild their pipelines in the new year, a trend that Song sees as a structural necessity rather than a simple trend. “It’s an important pillar where Big Pharma needs to replenish their pipelines, and they can’t all do it internally,” he explained.

Consequently, he believes the primary “hunting ground” for these deals is mid-cap territory, where acquiring one or two proven drugs can effectively move the needle for a large pharmaceutical giant.

AI in the biotech sector

Song maintained that AI has not reached full valuation in the sector, and its role is expected to grow, with significant future productivity gains predicted in biopharma, drug discovery, clinical development and healthcare delivery.

“We’ve done some preliminary work that that that suggests there could be … productivity gains in areas like biopharmaceuticals and drug discovery and clinical development,” Song explained, adding that these are long-term projections. He sees a more immediate economic impact in how care is managed.

“Since healthcare is a large part of the US and global economy, and growing quickly in terms of healthcare costs, there are also opportunities for efficiency gains, which could lead to margin and consumer gains,” he noted. This revolution in delivery is already a key focus for his firm’s Tema Oncology ETF (NASDAQ:CANC).

However, life science market analyst Anastasia Bystritskaya warned that valuation and productivity are not synonymous, as high-performing models do not automatically become revenue-producing products. For investors, the real inflection point is operational integration rather than operating as a standalone prototype.

Drive for efficiency is expected to take a practical form in 2026 through what Sergey Jakimov, managing partner at longevity and biotech venture capital firm LongeVC, described as the “doctor in your hand.”

This AI companion manages routine, low-complexity tasks between clinic visits.

LongeVC anticipates that this shift to a regulated digital workflow will allow AI to identify meaningful clinical signals continuously without overburdening primary care teams.

This democratization of discovery creates a new competitive landscape for the hunting ground Song described; if AI-enabled teams can dissect complex pathways without a billion-dollar balance sheet, the traditional R&D model of Big Pharma faces a permanent disruption. In this new era, the innovation gap could be filled by agile players who use technology to act with the scale of a giant, but the speed of a startup.

Investor takeaway

Despite sector momentum, headwinds remain, particularly regarding the stability of clinical research funding.

A November report in JAMA Internal Medicine reveals that 383 clinical trials recently had their grants terminated, disrupting progress for over 74,000 participants. Dr. Gary K. Zammit, founder of Clinilabs, warned these reductions in National Institutes of Health funding risk slowing future commercial development of innovative therapies.

Macroeconomic headwinds, including rising tariffs and early labor market weakness, also present a material challenge.

Ultimately, the 2026 biotech outlook balances promising catalysts with the need for strategic capital deployment and a focus on clinically validated platform technologies, ensuring a durable expansion for the sector.