Halloween is upon us, and before you know it, Christmas will be here.
From an investment standpoint, the upcoming holiday season is often seen as a time to reflect on our portfolios and make any last-minute adjustments before the end of the year.
A flurry of news this past month on some of these stocks has presented an opportunity for investors to capitalize. Let’s look at some of them.
Metro, Inc. (TSX:MRU) raised the brows of investors everywhere when the company announced it would be acquiring Quebec-based Jean Coutu pharmacy group in a deal reportedly worth $4.5 billion. This is a massive deal for the grocer, which has surprisingly lacked a pharmacy arm to counter the acquisition of Shoppers Drug Mart by its main rival Loblaw Companies Limited.
Here’s the scary part: most investors don’t realize two very significant things about Jean Coutu. First, the company owns 184 buildings in Quebec, which are franchisee owned. This means that Metro will also receive a stream of income from those properties in addition to a cut of the revenue.
The second, lesser-known point is that Jean Coutu is not only a pharmacy distributor, but it also manufactures a line of generic medications. This is an interesting, yet often neglected point that could prove incredibly valuable if the pharmacy’s reach were to expand into Metro’s sizable network.
BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) formally announced a new handset earlier this month known as the Motion. While that in of itself might seem as a scary development for some investors, the Motion is a step forward in terms of handset design and is built through BlackBerry’s hardware partner agreements.
So, where does the opportunity with BlackBerry lie? Not with the Motion, but in the automotive sector. BlackBerry has been making inroads into the automotive sector for some time now — first through QNX, the company’s hardened and secure OS already used in millions of vehicles, but now the company is expanding into a more traditional landscape: security.
Vehicles are becoming more connected and more reliant on multiple systems communicating with one another. Vehicles now speak with smartphones, with dealerships for diagnostics, and relay information about the vehicle and the environment constantly, with little regard to security. This is both shocking and intriguing, and BlackBerry intends to capitalize on that.
BlackBerry announced last week a new cybersecurity arm aimed at improving security around the connected and autonomous car space, which already numbers over 112 million vehicles. Connected and autonomous cars are often regarded as the next evolutionary step in driving, yet there is little, if any, regard made with respect to security.
This is a massive opportunity for BlackBerry, and one which is severely under-represented in the marketplace now.
Shopify Inc. (TSX:SHOP)(NYSE:SHOP) has long been considered one of the most intriguing opportunities on the market. The company offers a quick alternative to traditional e-commerce solutions that are both modular and easy to scale up and down to the needs of its customers.
Despite being wildly successful by providing that e-commerce solution to over 500,000 businesses, Shopify became the target of a stinging report from a short seller claiming the company was just another get-rich-quick scheme.
As expected, Shopify’s stock dropped on the news, but as Warren Buffett has taught us, fear and greed can make an excellent buying opportunity.
Shopify’s stock has since recovered somewhat, but the stock is still slightly lower than it was before the report was released.