Advertisement
Canada markets closed

  • S&P/TSX

    24,439.08
    -32.09 (-0.13%)
     

  • S&P 500

    5,815.26
    -44.59 (-0.76%)
     

  • DOW

    42,740.42
    -324.80 (-0.75%)
     

  • CAD/USD

    0.7260
    -0.0001 (-0.02%)
     

  • CRUDE OIL

    70.80
    +0.22 (+0.31%)
     

  • Bitcoin CAD

    92,453.80
    +2,266.70 (+2.51%)
     

  • XRP CAD

    0.75
    -0.01 (-0.96%)
     

  • GOLD FUTURES

    2,682.10
    +3.20 (+0.12%)
     

  • RUSSELL 2000

    2,249.82
    +1.18 (+0.05%)
     

  • 10-Yr Bond

    4.0380
    -0.0600 (-1.46%)
     

  • NASDAQ futures

    20,378.50
    +36.50 (+0.18%)
     

  • VOLATILITY

    20.64
    +0.94 (+4.77%)
     

  • FTSE

    8,249.28
    -43.38 (-0.52%)
     

  • NIKKEI 225

    39,093.46
    -817.09 (-2.05%)
     

  • CAD/EUR

    0.6661
    -0.0002 (-0.03%)
     

The Bullish Market Left These 3 Stocks Behind, But They’re Buys Right Now

Andrew Button
·4 min read
A bull outlined against a field
Image source: Getty Images.

Written by Andrew Button at The Motley Fool Canada

We are currently in the middle of a bullish market that has lifted many stocks. Tech stocks have benefitted the most, while other stocks have benefited to a lesser extent. For the most part, the markets as a whole have risen, with the TSX Index, in particular, being up 10.3% over the last year.

However, this rising tide has definitely not lifted all boats. For one reason or another, individual stocks have gotten lost in the shuffle. In some cases, it is due to real, persistent issues; in other cases, it is due to unjustified pessimism. In this article, I will explore three stocks that the bullish market left behind but may nevertheless be good buys today.

Air Canada

Air Canada (TSX:AC) is an airline stock that the market left behind long ago. The stock had been trending upward for over a decade, but in 2020, the COVID-19 pandemic hit, and AC stock crashed 71.52% from top to bottom. The stock’s current price ($17.07) is closer to the COVID-19 era lows than to the previous highs. However, the business performance today is much closer to that seen in 2019 than the performance observed in the disaster years of 2020 and 2021.

In 2020, Air Canada lost $4 billion. It lost several billion more in 2021. Today, it does over $2 billion in annual profit. As a result of the low stock price and relatively high earnings, AC has just a 2.92 price-to-earnings (P/E) ratio today. Definitely a TSX stock worth considering.

TD Bank

Toronto-Dominion Bank (TSX:TD) is another stock that has lagged the market over the last five years. Unlike Air Canada, it is not actually down over that period, but it’s only up about 5%. The big problems for Air Canada started in 2022. That year, the company announced that it was trying to buy out the U.S. regional bank First Horizon. In 2023, the bank’s First Horizon deal was scuttled due to money-laundering concerns.

Things really got intense this year. In 2024, The Wall Street Journal reported that TD Bank’s deal was scuttled due to fentanyl-related money laundering. The bank itself later revealed that it had booked $615 million in charges related to upcoming fines. This was certainly all very bad news, but as a result, TD is now one of the cheapest North American money centre banks, trading at 9.5 times earnings. If the fines really spiral out of control, then maybe my thesis could get busted, but I think the current issues will blow over.

Enbridge

Enbridge (TSX:ENB) is a Canadian pipeline stock that has barely risen over the last five years. Its dividend has risen over the last five years, which has resulted in a 7.3% dividend yield. Enbridge recently managed to get its dividend payout ratio below 100%. That’s a distinction it hadn’t held in some time. It could benefit from a Trump victory in the upcoming U.S. election because Trump is generally very pipeline-friendly. The company is a vital component of North America’s energy infrastructure, transporting 30% of the continent’s crude and 75% of Ontario’s natural gas. It isn’t going anywhere.

The post The Bullish Market Left These 3 Stocks Behind, But They’re Buys Right Now appeared first on The Motley Fool Canada.

Should you invest $1,000 in Air Canada right now?

Before you buy stock in Air Canada, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Air Canada wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $17,069.60!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 28 percentage points since 2013*.

See the 10 stocks * Returns as of 7/18/24

More reading

Fool contributor Andrew Button has positions in Toronto-Dominion Bank. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

2024