The period between Labor Day and the Holidays gets a bad reputation. Historically, September has been a challenging month for investors. And some investors swear by an October effect for equities. Still, early fall can be an ideal time to dive into the stock market. One of the reasons is because of what comes after October. The Holiday season is historically one of the best periods for stocks. And you can’t enjoy that growth if you’re not in the market.
Some investors might be scared off to invest in foreign markets right now. However, investors looking for more diversity in their portfolio would do well to look at Canadian stocks. The Toronto Stock Exchange (TSX) is up over 16% for the year and sits at CAD$16,643 as of this writing. Many of the companies that trade on the TSX also trade on American exchanges. Here then, are 10 Canadian stocks that are poised for ambitious growth.
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- Canopy Growth
- Canada Goose
- Bonterra Energy
- BlackBerry
- Questor Technology
- Bank of Nova Scotia
- Spin Master
- Lightspeed POS
- Suncor Energy
- Telus
#1 - Canopy Growth (TSE:WEED)
Canopy Growth (TSE:WEED) CGC, like all cannabis stocks, has been hit hard for a variety of reasons. Most notably, the stock suffered when regulatory delays caused an oversupplied Canadian market. Canopy, specifically, suffered from rumors that the company engaged in channel stuffing. However, Canopy Growth stock is well-positioned to move higher when the market for selling edibles opens in October. CGC plans to bring edibles and cannabis-infused beverages by December. Canopy also looks to be a major player in the vaping market. However, it remains to be seen to what extent Canada will follow the United States in regulating this market. The real growth for Canopy, as with other cannabis companies, will come when full legalization becomes a reality in the United States. The marijuana industry is moving into an important growth phase that will be punctuated by mergers and acquisitions. Canopy figures to exit this stage as one of the major players in this market that some analysts see as a $100 billion or higher when full legalization becomes a reality.
About Canopy Growth
Canopy Growth Corporation, together with its subsidiaries, engages in growing, possession, and sale of medical cannabis in Canada. Its products include dried flowers, oils and concentrates, softgel capsules, and hemps. The company offers its products under the Tweed, Black Label, Spectrum Cannabis, DNA Genetics, Leafs By Snoop, CraftGrow, and Foria brand names.
Read More - Current Price
- C$4.04
- Consensus Rating
- Strong Sell
- Ratings Breakdown
- 0 Buy Ratings, 1 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- C$6.26 (55.0% Upside)
#2 - Canada Goose (TSE:GOOS)
Canada Goose (TSE:GOOS) Canada Goose stock is a victim of elevated expectations. Retail is a challenging sector in the best of economies. With some studies pointing to weakening in consumer spending, Canadian retail stocks plunged. GOOS was among them, diving 40% from highs reached in 2018. However, after the decline, the stock looks to be priced at a much more realistic level. The company reported a 59% increase in first-quarter earnings, but the stock has remained stuck in neutral due to the trade war between the U.S. and China. In addition to the strong earnings report, analysts are cheering the efforts that Canada Goose is making to diversify their portfolio to include lightweight spring wear. The new additions are expected to boost sales growth by 50% this year. The stock is still trading at about a 30% discount to its February high making it an attractive option for investors looking to buy stocks that are on sale.
About Canada Goose
Canada Goose Holdings Inc, together with its subsidiaries, designs, manufactures, and sells performance luxury apparel for men, women, youth, children, and babies in Canada, the United States, Greater China, rest of the Asia Pacific, Europe, the Middle East, and Africa. The company operates through three segments: Direct-to-Consumer, Wholesale, and Other.
Read More - Current Price
- C$14.54
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- C$16.57 (14.0% Upside)
#3 - Bonterra Energy (TSE:BNE)
Bonterra Energy (TSE:BNE) - Bonterra is a small-cap oil company that pays an attractive dividend yield that is currently around 2.3%. BNEFF has seen its stock price cut by almost 75% over the past 12 months. However, for Bonterra that has brought its market cap down to approximately $125 million. That makes the stock attractive because it has the potential to multiply many times over. On the other hand, the company has a significant level of net debt that is currently worth approximately 177% of the company’s market cap. This would seem to justify the company’s PE ratio which, at 8.9 is below the Canadian market average of 14.1. The key for Bonterra 0will be to prove that they can continue to grow earnings. Over the past year, BNEFF’s earnings growth has exceeded the CA Oil and Gas Industry average (70.9% vs. 62.2%). It has also shown a nice reversal from its five-year average which was -0.25%. If they can continue to post solid earnings, then the attractive PE should spur stock price appreciation to compliment the dividend.
About Bonterra Energy
Bonterra Energy Corp., a conventional oil and gas company, engages in the development and production of oil and natural gas in Canada. Its principal properties include Pembina Cardium, a conventional oil field, at the Pembina and Willesden green fields located in central Alberta; and holds 100% interest in the Montney properties that consist of approximately 28,880 acres located in the north of Grand Prairie, Alberta.
Read More - Current Price
- C$3.20
- Consensus Rating
- Buy
- Ratings Breakdown
- 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- C$8.38 (161.7% Upside)
#4 - BlackBerry (TSE:BB)
BlackBerry (TSE:BB) This is not the BlackBerry most consumers remember. But that may be a good thing. BlackBerry is making a strategic pivot out of the handset (i.e. phone) market into the software arena. In the short term, the company looks like a shadow of its former self and investors are treating it that way. However, the long-term outlook on BlackBerry may be bright. The company’s P/S ratio has grown to 5.2X in the fiscal year 2019 largely due to the higher margins and stronger sales growth they are seeing in their software related business. Software and service-related sales no account for over 95% of BlackBerry’s revenue, a 110% increase from 2014 levels. The company’s P/S ratio is comparable to Microsoft and easily outpaces its rival Mobile Iron. In addition, BlackBerry is reporting higher adjusted net margins of approximately 14% as compared to the negative levels they were in five years ago. The company is currently embarking on a promotional world tour to tout its cybersecurity services.
About BlackBerry
BlackBerry Limited provides intelligent security software and services to enterprises and governments worldwide. The company operates through three segments: Cybersecurity, IoT, and Licensing and Other. The company offers CylanceENDPOINT, an integrated endpoint security solution; CylanceGUARD, a managed detection and response solution; CylanceEDGE, an AI-powered continuous authentication zero trust network access solution; CylanceINTELLIGENCE, a contextual cyber threat intelligence service; BlackBerry Dynamics offers a development platform and secure container for mobile applications; BlackBerry Workspaces a secure Enterprise File Sync and Share (EFSS) solution; BlackBerry Messenger (BBM) Enterprise, an enterprise-grade secure instant messaging solution for messaging, voice and video; BlackBerry SecuSUITE is a certified, multi-OS voice and text messaging solution; BlackBerry AtHoc, a secure networked critical event management solution; and BlackBerry unified endpoint management (UEM) solutions.
Read More - Current Price
- C$5.27
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 1 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- C$3.13 (40.7% Downside)
#5 - Questor Technology (CVE:QST)
Questor Technology (CVE:QST) Another small-cap stock that is worth a closer look is Questor Technology. Questor sells, rents, and services devices that companies will use to eliminate and reduce waste gasses. QST occupies an important strategic space as more countries are imposing environmental restrictions. These restrictions make Questor’s technology essential. Questor points to the ability of its technology to help companies save money and improve efficiency as key reasons why a company would look to change its existing operations. In the last three years, Questor’s EPS has grown by an average of 87% per year. The company is showing top-line strength as well with revenue up 11%. The company’s stock price has outperformed the overall sector which is negative in 2019. Despite what some analysts call a “flawless” balance sheet, the company’s stock has been volatile in the past few months. Still, it’s an attractive stock that is clearly outperforming its sector.
About Questor Technology
Questor Technology Inc, an environmental emissions reduction technology company, designs, manufactures, and services waste gas combustion systems in Canada and the United States. The company rents waste gas incineration systems. It offers its solutions for various oil and gas projects, as well as for landfill biogas, syngas, waste engine exhaust, geothermal and solar, and cement plant waste heat.
Read More - Current Price
- C$0.35
- Consensus Rating
- Hold
- Ratings Breakdown
- 0 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- C$0.50 (44.9% Upside)
#6 - Bank of Nova Scotia (TSE:BNS)
Bank of Nova Scotia (TSE:BNS) In recent months, BNS has spent billions of dollars building a presence in Latin America. The bank is specifically targeting Peru, Chile, Colombia and Mexico. These four countries are home to over 230 million consumers. The plan is for BNS to see rising demand for loans and investment products as the middle class in these countries grows. Growth from these countries would continue to boost the bank’s profit from international operations which already accounts for almost 30% of its profits. An additional sign of strength for the stock is insider buying. While executives may sell a company’s stock for a variety of reasons, there is typically only one reason to buy. That is, they expect the stock to appreciate from its current level. The Bank of Nova Scotia is one of Canada’s Banking All-Stars. The company recently raised its dividend to $0.03 per share. This was in addition to an additional dividend increase earlier in the year, putting their total dividend increase to 5.88% for 2019.
About Bank of Nova Scotia
The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates through Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets segments.
Read More - Current Price
- C$77.09
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 6 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- C$76.73 (0.5% Downside)
#7 - Spin Master (TSE:TOY)
Spin Master (TSE:TOY) Unicorns may not be real, but SpinMaster is banking on the fact that kids will still want their Llalacorn. This part unicorn, part llama toy is the latest in the company’s line of Hatchimals toys and launches in mid-September. The Llalacorn follows the company’s proven formula of being a cute toy that hatches from an egg. The egg takes around five minutes to hatch by tilting the egg back and forth. Each time the Llalacorn hatches it wakes up in one of 10 different moods. Walmart and Amazon are two retailers that have named the Hatchimals Wow Llamacorn as one of the 2019 Holiday season “hot toys”. This should increase the demand for the toy and provide a nice tailwind for the company’s stock price which has already seen a nice 12% gain for the year. A “Santa Claus rally” for the stock could put it close to the pace of the S&P 500 Index which is up 19.6% for the year.
About Spin Master
Spin Master Corp., a children's entertainment company, engages in the creation, design, manufacture, licensing, and marketing of various toys, entertainment products, and digital games in North America, Europe, and internationally. The Toys segment's product categories include activities, games and puzzles, and plush; wheels and action; outdoor; and preschool, dolls, and interactive products.
Read More - Current Price
- C$33.51
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 5 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- C$42.13 (25.7% Upside)
#8 - Lightspeed POS (TSE:LSPD)
Lightspeed POS (TSE:LSPD) As mobile technology continues to fundamentally disrupt traditional payment networks, Lightspeed POS is becoming a major player in Canada. The company’s stock has been one of the hottest stocks in Canada since launching its initial public offering (IPO) this past spring. Some are even suggesting that it could be the next Shopify. During the five months between April and early August, LSPD stock increased by more than 100% to $45 per share. The good news for investors is that the stock has come down a little bit meaning investors can get a second bite of the apple by buying the stock at a modest discount of $35 per share. Lightspeed’s revenue is projected to grow at a rate of over 20% annually which would exceed the Canadian market average. Of course, future projections on the stock are somewhat limited as Lightspeed is not yet profitable, but that’s the case with many growth stocks. Analysts applaud the company for its solid balance sheet which should support the growth in revenue.
About Lightspeed Commerce
Lightspeed Commerce Inc engages in sale of cloud-based software subscriptions and payments solutions for small and midsize businesses, retailers, restaurants, and golf course operators in North America, Europe, the United Kingdom, Australia, New Zealand, and internationally. Its Software as a Service platform enables customers to engage with consumers, manage operations, accept payments, etc.
Read More - Current Price
- C$23.08
- Consensus Rating
- Buy
- Ratings Breakdown
- 4 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- C$29.90 (29.5% Upside)
#9 - Suncor Energy (TSE:SU)
Suncor Energy (TSE:SU) Energy stocks can be boring. Unless the stock is undervalued. In that case, it offers the potential for attractive growth. That’s the case with Suncor Energy which, based on future cash flow projections is trading at a significant discount to the market. The question investors will have to answer is where they believe earnings are headed. Some analysts are projecting that SU will show negative earnings next year. However, for the past five years, the company has delivered over 20% year-on-year earnings growth. In the past year, the company’s earnings growth exceeded its five-year average as well as the average of the U.S. Oil and Gas Industry. However, even investors who may not buy into Suncor’s growth story should still pay attention to the company’s dividend. The company has been raising dividends in each of the last ten years and is currently showing a yield of 4.2%.
About Suncor Energy
Suncor Energy Inc is an integrated energy company. The company's operations include oil sands development, production and upgrading, offshore oil and gas, petroleum refining in Canada and the U.S. and the company's PetroCanada retail and wholesale distribution networks. The company is developing petroleum resources while advancing the transition to a low-emissions future through investment in power, renewable fuels and hydrogen.
Read More - Current Price
- C$49.60
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 8 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- C$61.89 (24.8% Upside)
#10 - Telus (TSE:T)
Telus (TSE:T) Telus is one of the three main telecom companies in Canada (in terms of market share). TU currently holds 30% of the total Canadian telecom market and serves approximately 10 million customers. The company has three main business units, the largest revenue driver being its wireless segment. In 2018, this segment accounted for 57% of total revenue. The company is coming off strong second-quarter earnings which saw a 2.8% increase in wireless volume and a 6.4% increase in wireline revenue. EBIDTA was up 9% and net income was up 31% YoY. The stock currently has a PE multiple of 16.82x, slightly below its 5-year average. However, the company’s price-to-book ratio is trading at an 11% discount to its 5-year average. The consensus price target for Telus is $52.15 which would be an 8% increase from the stock’s present value. As a long-term play, some investors may want to wait for the price to come down. However, since Telus also pays an attractive dividend, growth-and-income investors may choose to jump into the stock simply to capture the dividend.
About TELUS
TELUS Corporation, together with its subsidiaries, provides a range of telecommunications and information technology products and services in Canada. It operates through Technology Solutions and Digitally-Led Customer Experiences segments. The Technology Solutions segment offers a range of telecommunications products and services; network services; healthcare services; mobile technologies equipment; data services, such as internet protocol; television; hosting, managed information technology, and cloud-based services; software, data management, and data analytics-driven smart food-chain and consumer goods technologies; home and business security; healthcare software and technology solutions; and voice and other telecommunications services, as well as mobile and fixed voice and data telecommunications services and products.
Read More - Current Price
- C$19.92
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- C$24.23 (21.6% Upside)
One of the key principles of investing is diversification. With so much volatility affecting not only U.S. stocks, but global stocks, investors need to be more aware than ever of potential opportunities in other markets. Canadian stocks are performing well. In fact, some of the best-known cannabis growth stocks are Canadian companies and we’ve highlighted two of them in this presentation. But Canada is a great story for investors of all risk levels. There are some solid dividend performers as well as some under-the-radar stocks in sectors like retail. Fall can be a time for some investors to decide to pull back from the market. But with the Federal Reserve lowering interest rates, stocks are the place to be. As you do some fourth-quarter planning, consider these Canadian growth stocks as a way to gather some attractive year-end profits.
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