Halloween is finally here!
Some Canadians like to go trick or treating, others like to watch scary movies, and some get their fear fix by having a look at some of the scariest stocks trading on the TSX.
Here are four stocks that many investors may be frightened to invest in, but are these fears warranted? Or is it an opportunity to take Warren Buffett’s advice and be greedy while others are fearful?
BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY)
The long-term chart of BlackBerry is really horrifying. The stock lost most of its value along with the popularity of its smartphone; however, the company has reinvented itself, and many pundits, including Andrew Left of Citron Research, have had nice things to say about the company’s new growth trajectory.
In a time where cyber threats are increasing at an alarming rate, BlackBerry makes a strong case for why it should be the trusted name for safeguarding critical systems.
The QNX operating system is a sophisticated piece of tech that’s being tested in the connected cars of tomorrow to prevent hackers from gaining control to cars, essentially turning them into weapons.
The opportunity for BlackBerry is huge, and investors would be very wise to buy shares of this company with a scary-good growth profile.
Aurora Cannabis Inc. (TSX:ACB)
The volatile cannabis growth industry is frightening for those with lower risk tolerances, but for those with a strong stomach, the long-term rewards couldn’t be greater.
Management is focused on efficiency, and once its Aurora Sky greenhouse is up and running, I believe we’ll see efficiency and mass production fuse to create quarters that’ll be off the charts with triple-digit growth numbers, sending shares of ACB into the atmosphere.
The cannabis industry may be scary to some, but it’s an opportunity for those who have the cash to risk.
BCE is a long-time holding for many income-oriented investors who seek stability. Although the stock has delivered incredible capital gains in addition to dividend payments over the years, I believe the stock is positioned for underperformance from here because of several headwinds that will eat into profitability.
The Canadian wireless space is really going to get competitive with new entrants who are threatening to steal subscribers away from the Big Three players — the largest being BCE. In addition, BCE has a considerable amount of legacy infrastructure that won’t help it as wireless tech advances. That means BCE will need to spend more cash in a rising interest rate environment just to remain a top wireless carrier.
Incoming pricing pressures are inevitable, and, unfortunately for many shareholders, BCE is starting to become a ghost of its former self when you compare its past performance with what’s to come in the future. If I were a shareholder, I’d definitely be afraid — very afraid.
Canadian mortgage growth is a term that has horrified many investors for quite some time now. Many pundits agree that the Canadian housing market is way overdue for a correction, and should a violent correction occur, CIBC will be the Big Five bank who’ll suffer the biggest hit on the chin.
These fears have caused CIBC to become one of the cheapest stocks on the TSX today, and I believe many are already expecting the worst-case scenario, where housing flops and CIBC crumbles.
I think the fears are overblown and the housing market will gradually cool. That means those who are afraid of CIBC’s mortgage ramp up have nothing to fear but fear itself.
Stay smart. Stay hungry. Stay Foolish. And have a boo-rific Halloween!