2 Great Canadian Stocks That Could Skyrocket in Price
The Motley Fool
Published Apr 13, 2021 17:15
Updated Apr 13, 2021 17:45
2 Great Canadian Stocks That Could Skyrocket in Price
There are plenty of great Canadian stocks that could stand to skyrocket to unfathomable heights if all goes well with the COVID-19 vaccine rollout. The insidious coronavirus has plagued the markets for far too long, and once it’s conquered, I think some of the reopening plays could have amplified upside en route to normalcy.
In this piece, we’ll have a look at two Canadian stocks that could pop like a coiled spring. But be warned: each name faces considerable downside risks if the vaccine rollout is bumpier than expected or if COVID-19 variants of concern pull ahead of the vaccines. Right now, people are optimistic about a reopening, placing bets to play the Roaring ’20s. With such an increased risk appetite, I think it could pay dividends by adopting a more defensive approach by considering things that could go wrong.
It’s nice to be an optimist. But as an investor, it can be far more profitable to think and act like a contrarian. So, make sure you’ve got a balanced portfolio that’s positioned to win, regardless of what exogenous event ends up panning out next.
Consider Alimentation Couche-Tard (TSX:ATD.B) and Shopify (TSX:SHOP)(NYSE:SHOP), two stocks that I believe are unsustainably undervalued, with room to run going into 2022 and beyond.
Shopify It’s a bad idea to bet against Shopify. Just when you think the Canadian e-commerce juggernaut is about to fall back to Earth, the stock manages to defy the laws of gravity. The latest sell-off in the name, I believe, is just another one of many buying opportunities for long-term thinkers. While Shopify’s nosebleed valuation is less justified with pandemic tailwinds that are slated to end, I think investors should view such tailwinds as a growth accelerant, not some temporary boost.
Shopify stock has many opportunities to upsell its growing list of merchants. Given that Shopify’s TAM (total addressable market) is vast, I also think Shopify still has more room to grow, as it continues to improve upon its platform. The latest tech-driven correction, driven by higher U.S. bond yields, may just be getting started. Regardless, Shopify ought to be nibbled at while it’s still down because its brilliant CEO always finds a way to reignite the excitement in Canada’s largest company.
Alimentation Couche-Tard Couche-Tard is another great growth stock that’s rewarded investors who’ve bought on the dips over the years. The latest dip, I believe, is completely unwarranted. Essentially, shares of the convenience store kingpin corrected on news of an acquisition that fell through in an instant. Investors and analysts didn’t like or get Couche’s pursuit of Carrefour (PA:CARR). The deal has been off the table for months, yet Couche stock has still yet to recover.
Get The App
I think that’s a pricing blunder by Mr. Market and would encourage investors to accumulate shares before they warm up to Couche’s strategic pivot. Couche-Tard needs to buy a grocery supply chain. The sooner it does, the greater the long-term profitability prospects will be. Although over the short term, I suspect investors will accuse Couche of wandering outside its circle of competence.
If you’re not a fan of Couche’s potential pivot into supermarkets, look no further than Amazon.com (NASDAQ:AMZN) and its Whole Foods acquisition. The deal was met with great praise. The same should have been the case when Couche tried to scoop up Carrefour.
In any case, I’d buy Couche now before it has a chance to correct to the upside.
The post 2 Great Canadian Stocks That Could Skyrocket in Price appeared first on The Motley Fool Canada.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Joey Frenette owns shares of ALIMENTATION COUCHE-TARD INC and Amazon. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC, Amazon, Shopify, and Shopify and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2021
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.