Yahoo Finance 3 Top Stocks to Buy in a Once-in-a-Decade Opportunity
Written by Amy Legate-Wolfe at The Motley Fool Canada
Right off the bat, how on earth should I know that these stocks are a once-in-a-decade opportunity? The answer is surprisingly simple. About once a decade, markets around the world enter a downturn. That downturn leads to a recession during that time, when shares can drop anywhere from 20% to 40%.
In the case of these three top stocks then, there is a small window before we see shares rise again. These top stocks may be down, but pretty much the moment the market starts to recover, investors will be drooling over these stocks once more. Which is why now is the time to get in before the market rebounds.
Kinaxis stock
Shares of Kinaxis (TSX:KXS) have already started to climb, up 21% in the last year, and 16% year to date. This performance came from better-than-anticipated results during its fourth quarter report. Plus, the company expects future growth in 2023 of between 25% and 27% in terms of revenue.
In the last year, revenue climbed by 44% year over year, so these results certainly look achievable. Especially given that there is still such demand for Kinaxis stock and its software-as-a-service (SaaS). Large and small companies continue to need supply-chain management to solve the logistics issues we faced in the last few years. And Kinaxis stock can solve those problems.
Shares are still down from all-time highs at about $225 per share. To reach those prices, that’s a potential upside of 26% as of writing. Again, achievable given the potentially positive growth outlook in 2023.
goeasy stock
Another strong choice among investment opportunities is goeasy (TSX:GSY). Goeasy stock has been around for decades, and yet continues to achieve record earnings results quarter after quarter. This comes from huge increases in loan originations, even at a time when other financial institutions are seeing poor results.
These loans, however, continue to be in high demand given this high interest rate environment. Canadians need to save money wherever they can, and if they’re looking for lower rates, goeasy stock could be a strong option. Yet after strong increases in the last few years, shares dropped recently. This came from the Federal Government’s decision to cut the maximum allowable rate of interest to a 35% annual percentage rate.
Shares are down 28% in the last year and 10% year to date. However, GSY stock remains marked as a strong buy by analysts, as the company is still likely to do quite well even in this new interest rate environment. Just perhaps not as well as we’ve been used to. GSY now trades at a valuable 11 times earnings, with a 4% dividend yield.
CIBC stock
Finally, Canadian banks offer substantial return opportunities right now, especially with the market down during a recession. Financial institutions don’t do well during recessions, and this includes banks. Importantly, Canadian Imperial Bank of Commerce (TSX:CM) and the other banks have provisions for loan losses, protecting them during these downturns.
Yet with CIBC stock, the drop has been exaggerated. Many investors may fear we’re going to see the same kind of performance as we’ve seen in the United States. But those types of bankruptcies and dramatic closures are “remote,” as one analyst put it. Because of this, there is a strong reason to invest in Canadian banks like CIBC stock. Expect them to continue to post earnings and increase dividends.
Meanwhile, CIBC stock is down a significant amount by 20% in the last year, though up 5% year to date. CM stock was up higher, but again the U.S. bank performance led to a drop. So you can bring in shares at a valuable 11.5 times earnings, as well as a dividend yield at 5.85%!
The post 3 Top Stocks to Buy in a Once-in-a-Decade Opportunity appeared first on The Motley Fool Canada.
Should You Invest $1,000 In CIBC?
Before you consider CIBC, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in April 2023... and CIBC wasn't on the list.
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See the 5 Stocks * Returns as of 4/18/23
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Fool contributor Amy Legate-Wolfe has positions in Canadian Imperial Bank of Commerce, Goeasy, and Kinaxis. The Motley Fool recommends Kinaxis. The Motley Fool has a disclosure policy.
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